The Securities and Exchange Board of India vide its notification dated 30th March 2022 has issued clarification and guidance for smooth implementation of the amended regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (‘LODR Regulations’). This notification shall come into force with effect from April 1, 2022
Regulation 23 was amended vide notification dated November 9,2021, inter-alia, enhancing the scope of related party, related party transactions(RPTs)and the materiality threshold for seeking shareholder approval. However based on the representations received from listed entities and industry bodies, it has been decided to provide the following clarifications and guidance for smooth implementation of the amended Regulation 23 of the LODR Regulations.
- For an related party transactions (RPTs) that has been approved by the audit committee and shareholders prior to April 1, 2022,there shall be no requirement to seek fresh approval from the shareholders.
- An RPT that has been approved by the audit committee prior to April 1, 2022 which continues beyond such date and becomes material as per the revised materiality threshold shall be placed before the shareholders in the first General Meeting held after April 1, 2022.
Transparency, accountability and shareholder empowerment are the bedrock of robust corporate governance. Listed entities, therefore, shall ensure to comply with the spirit of the law and endeavor to provide relevant and detailed information to enable and empower share holders for taking an informed decision.
