March 31, 2022
Summary of the circular issued by SEBI on 30/03/2022
Clarification on requirement of Shareholders’ approval for material RPTs under LODR Regulations, 2015 w.e.f 01/04/2022
SEBI vide its notification dated 09/11/2021 required that w.e.f April 1, 2022, all material related party transactions and subsequent material modifications shall require prior approval of the shareholders through resolution. In this connection, SEBI has now clarified that-
1. an existing 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 1st General Meeting held after April 1, 2022, as per regulation 23(8) of LODR. No fresh approval is required for an RPT that has been approved by the audit committee and shareholders prior to April 1, 2022.
2. an RPT for which the audit committee has granted omnibus approval shall continue to be placed before the shareholders if it is material in terms of Regulation 23(1) of the LODR.