New Delhi: To improve corporate governance at listed companies, a high-profile Sebi panel has recommended payments made by such entities to related parties for usage of brand and royalty should need approval from majority of non- promoter shareholders. In case, where royalty payout levels exceed 5% of consolidated revenues, the panel headed by eminent banker Uday Kotak suggested the terms of conditions of such royalty must require shareholders’ approval. Currently, there is no specific provisions pertaining to payments made pertaining to brand and royalty to related parties. It also suggested that all promoters/promoter group entities that own 20 per cent or more in a listed company should be considered ‘related parties’. Capital markets regulator has sought public comments till November 4 on the panel’s recommendations, which run into 177 pages and covers a host of issues.

Source: Mint October 06, 2017 18:00 UTC