Listing Obligations and Disclosure Requirements

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RECLASSIFICATION OF PROMOTERS BY SEBI

The Securities and Exchange Board of India (SEBI) came out with its consultative paper on “promoter reclassification/ promoter group entities and disclosure of the promoter group entities in the shareholding pattern”[1] to seek public comments on November 23, 2020.

The topic of promoter reclassification has been a talking point since 2015, wherein the power to reclassify promoters laid in the hands of the company, rather than the promoter. Therefore, it was observed by SEBI that the process provided too wide a net to alter the tag of a “promoter”. Hence, in 2018, SEBI revamped the procedure and came out with the now inserted Regulation 31A of Listing Obligations and Disclosure Requirements Regulations, 2015.
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SEBI Working Group on Related Party Transactions

 In the battle for good governance, India Inc. keeps tripping on three letters – RPT. Related-Party Transactions. This, despite the fact that India has one of the most elaborate set of rules and regulations for disclosures and approval of RPT by both listed and unlisted companies.

Historically, the Companies Act, 1956 did not specifically regulate RPTs. It had provisions that only restricted certain types of transactions.

The Companies Act, 2013 (CA, 2013) enacted Section 188, which for the first time began regulating certain types of transactions between companies and its “related parties” (as defined in CA 2013), and provided for the approval of such transactions (exceeding a prescribed monetary threshold) by non-related parties.
Continue Reading SEBI Working Group on Related Party Transactions: Will the net be cast too wide?