Sebi Asks Cos to Give More Details on Related-Party deals

The securities and exchange board of India (Sebi)said on Tuesday companies should disclose more details to shareholder about related party transactions while seeking their nod.

The regulator said in a circular that listed companies have to provide justification on way the proposed transactions is in their interest.in

If the transaction relates to any loans, inter- corporate deposits, advances or investments made by the listed entity source of funds in connection with the proposed transaction should be disclosed, it said.

Besides, companies should also disclose all the terms including covenants, interest rate and repayment schedule and the purpose for which the funds would be utilized by the ultimate beneficiary.

Sebi said companies must provide more detail to audit committee to enable them to scrutinize the proposed related party transaction.

The companies have to give material terms of the proposed transaction name of the related party and its relationship with the listed company or its subsidiary.

While for a transaction involving a subsidiary, the percentage calculated on the basis should be provide, the regulator said.  S-ET

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