Vikash Kumar, LL.M., WBNUJS
ABSTRACT
Asian Paints Limited is one of the reputed companies in India but, in 2021, the company was at the center of controversy. The controversy against Asian Paints was triggered by the letters complaint to the SEBI that highlights related party transactions.1 Further, in their report, proxy advisory firms named InGovern emphasize the absence of good governance in Asian Paints. The report has the nexus with the allegations of the related party transactions to SEBI.2 But after a few days of the report, the Asian Paints has released their statement and stressed that the entire reports are on incorrect facts based on hearsay, and there is no serious investigation behind the report. Interestingly, no steps or not even a single statement was released by SEBI on this controversy. Many media houses like Business Line stated that their mail to SEBI on this issue remains unanswered.
This work revolves around the controversy and tries to analyze initially both the allegations, i.e., first the two letters to SEBI & second the report by InGovern. Further, it will highlight the rebuttal made by the Asian Paints on the allegations made by the advisory firm InGovern. Also, this work includes a brief overview of different legal principles involved like ‘related party transactions,’ ‘corporate governance,’ and ‘role of independent directors. Apart from the stand of the advisory firm and the rebuttal of Asian Paints, the work also includes the analysis of the entire controversy that helps determine whether Asian Paints Limited has violated the law of the land on the issue of related party transactions.
