SEBI vide circular dated April 08, 2022, has specified clarification on applicability of Regulation 23(4) read with Regulation 23(3)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in relation to Related Party Transactions.
I. Regulation 23(3)(e) of the SEBI LODR Regulations specifies that omnibus approval granted by the audit committee shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year.
II. Regulation 23(4) of the SEBI LODR Regulations requires shareholder approval for material-related party transactions (RPTs).
III. Representations have been received seeking clarity on the period of validity of the omnibus approval where the transactions are material and shareholders’ approval is also required.
IV. In order to facilitate listed entities to align their processes to conduct AGMs and obtain omnibus shareholders’ approval for material RPTs,
V. It has been decided to specify that the shareholders’ approval of omnibus RPTs approved in an AGM shall be valid up to the date of the next AGM for a period not exceeding fifteen months.
VI. In case of omnibus approvals for material RPTs, obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year.
VII. The Stock Exchanges are advised to bring the provisions of this circular to the notice of all listed entities that have issued specified securities and also disseminate on their websites.
Circular link :-
About the Author
