Related Party Transactions And Minority Shareholder Protection: A Critical Appraisal Of SEBI’s Recent Amendments
- IJLLR Journal
- Feb 20
- 1 min read
Shreyas Bala Reddy, Christ (Deemed to be University)
ABSTRACT
An arrangement between 2 parties that are combined by a special relationship before a transaction is named a Related Party Transaction (RPT). It is one of the recurring areas of concern raised by recent corporate scandals. Even though numerous studies were done on RPT and Minority Shareholder (MS) protection, there was inadequate research investigating the disclosure of RPTs under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (SEBI LODR) regulations, particularly concentrating on Corporate Governance (CG) and Materiality Threshold (MT). Therefore, in the present study, the RPTs and protection of minority stakeholders under SEBI LODR amendments are examined. The laws governing RPTs, such as the Companies Act (CA), 2013, and SEBI (LODR) Regulation 2015, are examined in the study. SEBI, which plays a major role in effective and transparent CG, sets standards for detecting Related Parties (RPs), determining MTs for RPTs, and outlining the approval processes. As per the study, the absolute threshold of ₹1000 crores for the determination of RPTs as material is brought pursuant to an amendment of SEBI (LODR) Regulation 2015 in November 2021.
Keywords: Securities and Exchange Board of India, Minority Shareholder Protection, Related Party Transactions, Corporate Governance, and Materiality Threshold.
