Cap. 386 Art. 157Removal of auditors.

(1) Notwithstanding anything in a company’s memorandum or articles or in any other agreement, the company may at any time remove an auditor from office in the same manner as that specified in article 140(1):

Provided that an auditor may only be removed from office as aforesaid if there is a proper ground for dismissal:

Provided further that divergence of opinions on accounting treatments or audit procedures shall not constitute a proper ground for dismissal.

(2) (a) Where a resolution removing an auditor is passed at a general meeting of a company, the company shall within fourteen days give notice thereof to the Registrar for registration. The company shall also, within the same period, deliver to the Board a statement by the company giving an adequate explanation of the reasons for the removal of the auditor. If a company fails to give the aforesaid notice to the Registrar or the aforesaid statement to the Board, every officer of the company who is in default shall be liable to a penalty in respect of each default, and for every day during which the default continues, to a further penalty.

(b) For the purposes of this sub-article, the Board shall have the meaning assigned to it by the Accountancy Profession Act.

(3) Nothing in this article shall be taken as depriving a person removed under its provisions of compensation for damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that of auditor.

(4) An auditor of a company who has been removed shall have, notwithstanding his removal, the rights conferred by article 155 in relation to any general meeting of the company -

(a) at which his term of office would otherwise have expired; or

(b) at which it is proposed to fill the vacancy caused by his removal.

In such a case the references in that article to matters concerning the auditor as auditor shall be construed as references to matters concerning him as a former auditor.

(5) In the case of a statutory audit of a public-interest entity, it shall be permissible for -

(a) shareholders representing five per cent or more of the voting rights or of the share capital of the company; or

(b) the Board referred to in sub-article (2), to bring a claim before the court for the dismissal of the statutory auditor(s) or the audit firm(s) where there are proper grounds for so doing.