Securitization Act 2002
Effect of takeover of management
The takeover of assets, has following effect:
SHAREHOLDERS CANNOT APPOINT DIRECTORS - After the takeover of assets, shareholders of company cannot appoint or nominate any director of the company.
NO RESOLUTION WITHOUT CONSENT OF SECURED CREDITORS - Any resolution passed by shareholders will be effective only if approved by secured creditors.
NO PROCEEDING FOR WINDING UP - No proceeding for winding up of such company or appointment of receiver shall lie in any court, without the consent of secured creditor.
NO COMPENSATION FOR LOSS OF OFFICE - Any Managing Director or Director of the borrower shall not be entitled to any compensation for loss of office or for premature termination of any contract of agreement with the borrower. However, the MD or director or manager shall be entitled to any other money receivable, other than compensation.