MAURITIUS Law and Practice Contributed by: Professor Michael Katz, Laksha Juddoo Prayag, Anne-Sophie Lenette and Ayesha Rambajun, ENS
3.5 Independence of Directors Independence Requirements
An interested director must promptly record the inter - est in the interests register and disclose to the board its nature and monetary value (if quantifiable). This does not apply to ordinary course transactions on usual terms. A standing general notice suffices for
An “independent director” is defined as a non-execu - tive director who is not an employee of the company; does not have a material business relationship with the company, whether directly or through an associ - ated organisation; does not receive remuneration or benefits from the company other than in their capacity as a director; is not a nominated director representing a substantial shareholder; does not have close family ties with any adviser, director or senior employee of the company; does not hold cross-directorships or significant links with other directors through involve - ment in other companies or organisations; and has not served on the board for more than nine continuous years from the date of their first election. Independence is not generally required, though public companies must have at least two independent direc - tors and bank boards must comprise at least 40% independent directors including the chairperson. Oth - er sectors may have specific requirements. Conflicts of Interest Directors must act in the company’s best interest. They may not compete with the company or hold office with a competitor (unless approved under the CA), must account for gains derived from their posi - tion, and must not misuse or disclose confidential A director wishing to engage in otherwise prohibited activities must disclose all material facts and obtain approval by either a written resolution signed by three- fourths of voting members, or an ordinary resolution at a meeting where the interested director (and holders of shares in which the director is beneficially inter - ested) does not vote or their votes are not counted. Disclosure of interests in transactions A director is considered “interested” where they may derive a material financial benefit, have a material interest in another party, hold office with another party, are related (parent, child or spouse) to a benefiting party, or are otherwise directly or indirectly materially interested in the transaction. information except as permitted. Approval for competing activities
future transactions with the same entity. Avoidance of interested transactions
The company may avoid a transaction in which a director is interested within six months of disclosure to all shareholders, unless fair value was received. Ordinary course transactions on usual terms are pre - sumed at fair value. The burden of proving fair value falls on a person seeking to uphold the transaction if they knew or should have known of the interest; oth - erwise the company must show it did not receive fair value. Avoidance on the ground of a director’s interest may only occur under this statutory provision or the company’s constitution. Avoidance of a transaction does not affect the title of a third party who acquired property from someone other than the company, for valuable consideration, and without knowledge of the relevant circumstances. Voting by interested directors In a public company, an interested director may not vote on the relevant matter. In a private company, an interested director may vote if the interest is disclosed under Section 148 of the CA. In both cases, the inter - ested director may attend, count in the quorum, and otherwise act as director, subject to the constitution. For listed companies, a director with a material inter - est may not vote or be counted in the quorum, subject to specified exceptions. Use of company information A director must not disclose, use or act on informa - tion obtained in their capacity as director or employee that would not otherwise be available to them, except for the purposes of the company, as required by law, where authorised by the board, or as otherwise per - mitted by the constitution or approved under Section 146 of the CA. The board may authorise disclosure if not prejudicial to the company, with particulars recorded in the interests register. Any gain from such use must be accounted for.
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