Published Online:January 2025
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG040125
DOI:10.71329/IUPJCG/2025.24.1.67-88
Author Name:Kaushiki Brahma
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:67-88
Following the recent corporate frauds involving related party transactions (RPTs), this study seeks to assess the trends of abusive RPTs of listed companies in India. Abusive RPTs are more likely to occur in highly concentrated ownership structure by expropriating minority shareholders. The study analyzes the impact of ownership structures on abusive RPTs based on shareholding pattern, highlighting the trends in RPTs conducted by companies to defraud their investors. The paper discusses the nature of abusive RPTs in listed companies and examines the effect of the present Indian regulatory framework on RPTs based on a comprehensive qualitative content analysis of 33 non-financial companies, against whom SEBI has passed orders for abusive RPTs. The study examines the annual reports of the selected companies to ascertain the related parties involved, ownership structure, board structure, CEO duality, and board ownership concentration in the companies. And the findings reveal initial evidence of abusive RPTs and raises questions about the current corporate governance mechanisms for monitoring and disclosure of RPTs in listed companies. The trends of abusive RPTs and the impact of corporate governance framework on monitoring of RPTs will assist the capital market regulators to revamp the monitoring and disclosure requirements.
the last two decades, related party transactions (RPTs) have posed major challenges to minority shareholders’ rights and corporate governance, often because of several high-profile corporate scandals across the world (Marchini et al., 2019).