Disclosure dilemma: Why Sebi’s new rules on related-party transactions are under fire
Subscribe to enjoy similar stories. The market regulator’s recent guidelines outlining tougher disclosure requirements for related-party transactions has sparked significant apprehension about increased compliance burdens and potential operational delays. The directive, issued on 14 February, aims to enhance transparency and fairness in the related-party transaction approval processes, mandating stringent disclosure and certification requirements.
Even M. Damodaran, former chairperson of the Securities and Exchange Board of India, has criticized the directive, calling it an “elaborate document’ with inconsistencies. “It has so many things that if you take them seriously, you will have a problem.
It is better to read them, laugh at them and go on with life. Because there are inconsistencies within that document," he said at a governance and risk management event on 5 March. The Industry Standards Forum (ISF)—comprising representatives from the Associated Chambers of Commerce and Industry of India (Assocham), Confederation of Indian Industry (CII), and Federation of Indian Chambers of Commerce and Industry (Ficci)—had formulated the new guidelines in consultation with the stock exchanges and Sebi.
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