Section 188
Guest
(Querist) 27 June 2015
This query is : Open
The listing agreement provides exemption from obtaining approval of Audit committee for related party transactions between two government companies. MCA vide its notification dated 5th Jun’15 provides exemption from obtaining approval for related party transactions between two government companies.
MCA has granted exemption from section 188 for transactions between two Govt. Companies but not from section 177(4) (iv).
Terms of reference of audit-committee inter-alia includes approval or modifications of all RPTs.
Therefore, above transactions need approval of audit-committee. However, no approval of the board/shareholders will be required, if it does not attract section 188.
Others may express their views on the matter.
