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Govt likely to focus on strengthening related party clause in company law Feb 27, 2024

Corporate Laws

In the backdrop of big corporates like Zee Entertainment Enterprises Ltd (ZEEL) coming under scrutiny for alleged governance lapses, the Centre is likely to review the related party clause of the Companies Act 2013 and may look at further strengthening it, a senior government official said. “The government will focus attention on the related party clause. It will see if there is a need to strengthen it. How do we strengthen the related party clause? This will engage the government's attention. All the big investigations have found the issue of related party transactions. Currently, the regime is lenient and disclosure-based,” the official told Moneycontrol. The official said that the recent investigations of ZEEL are likely to allegedly expose the issue of related party transactions.

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