Saturday, August 15, 2015

MCA diluted Related Party Norms

The Ministry of Corporate Affairs has steadily diluted its stance on Related Party transactions since mid-2014: It lowered the threshold to pass resolutions to 50 per cent plus from 75 per cent, and prevented only interested parties from voting, while allowing related parties to vote. SEBI has not aligned itself to the new regulations — and rightfully so, in the interest of minority shareholders. Companies act, 2013 needs to align itself to SEBI’s Clause 49 requirements for listed companies, and not the other way around.

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