The Securities and Exchange Board of India (Sebi) on Thursday said that its modified regulations pertaining to passing of ordinary resolutions in case of all material related party transaction will come into immediate effect for listed companies.
In case of related party transactions, Sebi has now eased the rules for listed companies allowing them to secure a simple majority instead of a three-fourth majority of disinterested shareholders when voting on such transactions.
According to lawyers, this will dilute the undue power of disinterested shareholders in a related party transaction.
“This will strike the correct balance between interested and disinterested shareholders. While it will not allow interested shareholders to vote at all but at the same time it will only give simple majority right to disinterested shareholders thereby stopping them from blocking genuine related party transactions. These new regulations would make passing of related party transaction easier,” said Lalit Kumar, partner at law firm J Sagar Associates.
Earlier in July, the corporate affairs ministry has asked Sebi to align its guidelines for related party transactions with the amended Companies Act a move that did not go down well with some of the minority shareholders.
Sebi on Thursday also said that its new rules on classification of promoters as public shareholders will also come into effect immediately for listed firms, even as it gave 90 days to implement all the other provisions of the listing regulations.