Case Study I – Related Party Transactions – [Case 1]

In our series of case studies on corporate laws, we present to you our first case study on Related Party Transactions. Readers and viewers are invited to share their views and solutions in the comment section below –

Case Study 1- Related Party Transactions
1 reply
  1. Chirag
    Chirag says:

    As Per My View , SEBI regulations talks about the transfer of resources , services and obligation between the Related parties & listed entities read with IND AS 24 and consequently exceeding the particular threshold is required approval of shareholder of listed company, here as per given fact its clear that ODI and MP Pharma are Related party , and here the transaction as per the valuation report of Registered Valuer ( “RV”) is on Arm’s length basis ,but whether is in ordinary course of business of MP Pharma ( Answer may be No) , as well Sale of WOS is also change in controlling power of MP Pharma in NY Pharma USA company , due to its holding in OP Pharma is 60% only. Section 180 of companies act,2013 may also trigger. here OP pharma is a part of group company and having ODI Subsidiary( Due to no clarity on existing structure ,ODI will remain WOS – pre or post restructuring… but the transaction is an indirect transfer or resources to MP Pharma ( Parent Company) by doing capital infusion in ODI , so for better governance its recommended that such proposal should be tabled before audit committee and also approved by board /members as the case may be ,HNI is holding 12% in OP Pharma so if matters goes to shareholder’s approval , it may impact because Related party is not allowed to vote as per relevant provisions. lastly direct acquisition by MP pharma without through ODI route and advancing any capital to ODI , it will be termed as Investment for OP while Sale by MP(Intra Corporate Matter ) ,it may not require any specific approval for RPT because CFS remain same, I hope answers shall be shared…


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