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Regulatory changes for related-party transactions to boost corporate governance: Fitch

Regulatory changes for related-party transactions to boost corporate governance: Fitch

Fitch Ratings on Monday said the recent changes by market regulator Sebi will tighten the rules governing related-party transactions and ease the delisting process. The revised related-party transaction norms will widen the scope of scrutiny and limit the ability of large shareholders “often the founder family or promoters” to enter into such transactions without the approval of minority shareholders. This should strengthen the corporate governance of listed companies, it said.

The delisting changes should facilitate greater transparency and more effectively balance the interests of acquirers and public shareholders. They should also result in quicker execution, Fitch added. “Recent changes made by the Securities and Exchange Board of India (Sebi) will tighten the rules governing related-party transactions (RPT) and ease the delisting process,” Fitch Ratings said in a statement

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