The newly-launched RPT portal is akin to bringing sunlight into boardrooms, said SEBI Whole Time Member Ashwani Bhatia on February 14. "It is often said that sunlight is the best disinfectant. This portal will bring that sunlight into corporate boardrooms, nudging companies towards higher governance standards," he said. Bhatia was speaking in Mumbai on February 14 at the launch of India's first, dedicated portal to track and analyse related-party transactions (RPTs).
Bhatia explained that the initiative aims to democratise access to crucial information, ensuring that all investors — retail or institutional — can access standardised and comparable data on RPTs.
He added that the role of the RPTs have long been an essential part of business operations. “When done right, they unlock synergies, streamline operations and create efficiencies that benefit all stakeholders. Whether it is vertical integration, ensuring a smooth supply chain, horizontal integration strengthening market reach or inter-group transactions, they are more reliable due to an established trust,” he said.
Bhatia added that RPTs can be a powerful tool for business growth. However, the problem arises when these transactions are not conducted at arm's length. “When the price is not fair, when transparency is lacking and when such transactions benefit a select few at the cost of public shareholders, the integrity of our markets is at stake,” he said. This could lead to shareholder wealth destruction, regulatory scrutiny and a loss of investor confidence.
The portal, he noted will help democratising access to crucial information and provide a central repository of standardized RPT data, single source of analysis for investors, benchmarking of transactions for investors to compare across companies to assess the fairness of transactions.
On the matter of ESG, Bhatia noted that globally ESG factors are shaping investment decisions. Among the three, governance or the G is a bedrock upon which E and S stand.
“By focusing on RPT disclosures, this portal will shine a light on the G aspect of ESG strengthening governance practices across corporate India. Investors will no longer have to second guess whether a transaction benefits a company or just a select few because now data will speak for itself on a common platform for the common good,” he said.
Bhatia also urged stakeholders – from MFs, FPIs to even the media -- to take cognizance and participate in helping the portal grow.
He added that as they launch this initiative, they are not just unveiling a portal, they are laying the foundation for a more transparent, accountable and investor-friendly market.
"Warren Buffett once said it takes 20 years to build a reputation and just 5 minutes to ruin it. This portal ensures that corporate reputations are built on trust, transparency and good governance. Let's take this step together towards a future where investors, big or small, can invest with confidence knowing that they have access to the right information at the right time,” he said.
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