Sebi to tighten standards for listed companies: Buch

ET BureauLast Updated: Feb 15, 2025, 08:03:00 AM IST

Synopsis

The Sebi chief said she would be happy to throw the entire Listing Obligations and Disclosure Requirements (LODR) Regulations into the bin, barring RPT.

Mumbai: The Industry Standards Forum (ISF) has approved the new standards for disclosures around related party transactions (RPT) for listed companies, Sebi chairperson Madhabi Puri Buch said on Friday.

"The high-quality work that the industry itself has come up with in terms of what are the minimum disclosures that would need to be made by the companies when they take an RPT for approval, both to the audit committee, and also to the shareholders for approval," Buch said.

"Going forward, the quality of information that will reach the audit committee members and the public shareholders at the time that they are asking for their approval is going to be an order of magnitude different from what it is today."

She was speaking at the launch of the first dedicated portal to track and analyse related-party transactions.

The Sebi chief said she would be happy to throw the entire Listing Obligations and Disclosure Requirements (LODR) Regulations into the bin, barring RPT.

She said whenever a business decision is taken, the promoter has the same objective as the minority shareholder. The only place where there is a divergence is when the decisions involve RPTs.

"When the counterparty to a transaction, particularly a large transaction, is the promoter's own entities, then there is an automatic conflict of interest," Buch said.

She also said the largest number of queries the regulator gets from institutional investors, including foreign investors is around RPTs.

"This really reflects the fact that what they want to see and what they want to have is more trust in the listed space."

...moreless

...moreless