Industry bodies make representation to Sebi; plea to review related party norms

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MUMBAI: Industry bodies have made a representation to Sebi seeking changes in the new norms on related party transactions that will come into effect from April 1. They have argued that the norms will make it difficult for companies that are large financial investors like LIC and will need to frequently obtain shareholder approval for transacting with firms they have invested in.
The new related party transactions norms were introduced by Sebi last year to curb the diversion of funds by promoters. The norms were part of the listing and disclosure requirements and were aimed at improving corporate governance in companies.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has called upon the markets regulator to make some changes. It has suggested that the definition of promoter group company should apply only to those entities holding more than 5% of the listed entity….

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