Page 12 - Banking Finance December 2021

ROUNDUP

Industry

News

SEBI issues new rules for Under the new rules, Sebi said the re- ers. The funds that companies have to
lated party will be any person or en- transfer to IEPF includes unclaimed
related-party transactions tity belonging to the promoter or pro- dividend, matured deposits, matured
Sebi has made sweeping changes to moter group of the listed entity. debentures, application money due for
strengthen the monitoring and en- refund, or interest on it and redemp-
Besides, any person or any entity, di-
forcement of norms pertaining to re- tion proceeds of preference shares.
rectly or indirectly (including with their
lated-party transactions. The regulator
relatives), holding 20 per cent or more
has tweaked the definition of 'related Punjab to scrap 40000
of the holding in the listed entity dur-
party' and 'related-party transactions'
ing the preceding fiscal and 10 per cent cases of VAT against trad-
(RPTs), according to a notification is-
or more with effect from April 1, 2023,
sued. ers, industrialists
will be considered as a related party.
It made changes to the process fol- Punjab Chief Minister Charanjit Singh
lowed by a company's audit committee Refund of unclaimed in- Channi announced to scrap 40,000
for approval of RPTs that are material. pending cases of value-added tax
vestments in companies
Further, there will be a format for re- (VAT), out of the total 48,000 cases
porting of RPTs to the stock exchanges. made easier related to the financial years 2014-15,
2015-16 and 2016-17, against traders
Cases like Zee, Dish TV and the recent The ministry of corporate affairs has
and industrialists across the state.
ruling by NCLT in the Videocon case made it easier for investors to claim
might have probably triggered changes refunds of their unclaimed dividends, CM Channi said only 8,000 remaining
in the RPT framework. deposits and application money that cases will be settled amicably by ask-
companies have transferred to the In- ing the concerned traders/ industrial-
According to experts, any transaction
vestor Education and Protection Fund ists to deposit only 30 per cent of the
benefiting a related party (even indi- total outstanding tax liability, thus sav-
rectly) will need the approval of the (IEPF).
ing them from a lot of inconvenience
audit committee and shareholders of Companies Act mandates that busi- caused to them on this count.
a listed company. When the transac- nesses transfer to IEPF all the dues to
tion is with a third party but may ben- shareholders which are unpaid or un- He announced that they will only have
efit related party will be difficult to claimed for seven years. Shareholders to deposit 20 per cent of the tax liabil-
identify and can sometimes lead to un- can seek a refund of the same from ity during the current fiscal and the
necessary allegations of violation on IEPF. The latest move is to make the balance 80 per cent by the next.
corporates. process of refund easier for sharehold- CM Channi said this industrial-friendly

12 | 2021 | DECEMBER | BANKING FINANCE