Published On: 01/01/2014
Authors:
Uncles, aunts, cousins, nephews; in India, ‘related parties’ are everywhere. The existing provisions governing related party transactions when juxtaposed with extant structures and practices in India have seemed largely inadequate. This Article seeks to evaluate whether such concerns have been addressed in the new provisions of the Companies Act, 2013 (“New Companies Actâ€). Hitherto, the Companies Act, 1956, Listing Agreement of the National Stock Exchange ("Listing Agreement") and Accounting Standards issued by the Institute of Chartered Accountants of India (“AS 18â€) provided the legal framework governing related party transactions. From the scheme of the New Companies Act, it seems that the legislature has given significant importance to addressing corporate governance related issues. Regulating related party transactions through effective supervision and transparency is an important aspect of good corporate governance. This Article will also briefly review the same key provisions of the New Companies Act in light of corporate governance principles