Transactions between 2 govt firms exempt from prior nod requirements by audit committee for RPTs, says Seb

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Transactions entered into between two state-run companies are exempted from taking prior approval of the audit committee and shareholders for related-party transactions, markets regulator Sebi clarified on Wednesday..

The clarification came after NTPC sought informal guidance about related party transactions (RPTs) under the LODR (Listing Obligations and Disclosure Requirements) rules.. The state-owned company has sought clarification on whether approval of an audit committee is required for transactions between NTPC and PTC India, and Energy Efficiency Services Ltd (EESL), where nominee directors are appointed by the Government of India.. Further, NTPC said it has invested in PTC India and holds a 4.05 per cent stake in the company..

Hence, exemptions are not applicable and prior approval of the audit committee would be required for RPTs with PTC or EESL as the case may be.. Further, the regulator said that all RPTs and subsequent material modifications will require prior approval of the audit committee of the listed company..

Full story at Economic Times | 

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