Banking Regulation Act, 1949 — back to Table of Contents
Section 45G. Public examination of directors and auditors
(1) Where a winding-up order has been made for a banking company, the official liquidator submits a report on whether, in their opinion, any loss has been caused to the company since its formation by any act or omission (whether or not fraudulent) of any person involved in its promotion or formation, or of any director or auditor.
(2) If, on considering that report, the High Court considers that any such person, director, or auditor should be publicly examined, it holds a public sitting and directs that person to attend and be examined as to the promotion, formation, or conduct of the company’s business, or their own conduct and dealings relating to the company’s affairs — provided the person has first been given an opportunity to show cause why they should not be examined.
(3) The official liquidator takes part in the examination and, if specially authorised by the High Court, may employ legal assistance sanctioned by the Court.
(4) Any creditor or contributory may also take part, personally or through someone entitled to appear before the High Court.
(5)–(6) The High Court may put any questions it thinks fit; the person examined is examined on oath and must answer all questions the Court puts or allows.
(7) A person examined may, at their own cost, employ someone entitled to appear before the High Court to ask questions enabling them to explain or qualify any answer given; if exculpated, the High Court may allow costs at its discretion.
(8) Notes of the examination are taken down in writing, read to and signed by the person examined, may be used in evidence against them in civil or criminal proceedings, and are open to inspection by any creditor or contributory at reasonable times.
(9) Where the examination leads the High Court to conclude (whether or not fraud was committed) that a person who was a director is unfit to be a director of a company, or that a person who was an auditor (or a partner of an auditing firm) is unfit to act as auditor, the Court may order that the person not act as director or auditor of any company, without leave of the Court, for a period not exceeding five years.
Note: Part IIIA was inserted by the Banking Companies (Amendment) Act, 1953.
