Transactions between 2 govt firms exempt from prior nod requirements by audit committee for RPTs, says Sebi

The Securities and Exchange Board of India (Sebi) has clarified that transactions between two state-run companies do not need prior approval from the audit committee and shareholders for related-party transactions. The clarification followed after NTPC sought guidance about related party transactions under the Listing Obligations and Disclosure Requirements (LODR) rules. NTPC asked if the audit committee must approve transactions between it and PTC India and Energy Efficiency Services, where government of India nominee directors are appointed. Sebi said government nominees are on the boards of PTC and EESL, but neither are government companies, so the RPT exemptions do not apply.

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