Through the RPT portal, audit committees and managements can learn how peers conduct themselves on disclosures: SEBI's Pramod Rao

Through the RPT portal, audit committees and managements can learn how peers conduct themselves on disclosures: SEBI's Pramod Rao

Through the newly-launched RPT portal, audit committees and managements will be able to see how their peers in the sector have conducted themselves, which will help will better understanding, according to SEBI ED Pramod Rao. He was speaking on February 14 at the launch of the first-ever Related Party Transaction portal. “Audit members should also, hopefully, see how other listed entities have conducted themselves on disclosure, evaluations, etc and specifically those in the same sector or their own peer sector. This can lead to better understanding when an entity is about to embark on a related party transaction and help all decision makers make more informed and suitable decisions," Rao said.

Talking about the importance of the portal, Rao explained that it brings together the viewpoints and recommendations of proxy advisory firms into one platform, which the investors can use to evaluate and form their own independent views. “It may also lead to a more discerning understanding of what a related party transaction fulfils both in terms of appearance and the actuality,” he explained. Additionally, benchmarking also helps curate and identify the blind spots one may have and expands the horizons for those involved and those consuming the benchmark services.

“To my mind, the RPT analysis portal is the first amongst many spotlights we will want to place on related party transactions,” he said.

Rao added that proxy advisors play a critical role in the review of related party transactions undertaken by the listed company or its subsidiaries with the related parties. “It's important that we sort of acknowledge that. With all the focus on RPTs being subject to approval by public investors and without participation of promoter and related party, the proxy advisory firms have become critical evaluators of such proposals and weighing in on the recommendations on whether investors should approve or reject the proposed RPT,” he said.