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Research Paper | Commerce and Law | Volume 15 Issue 3, March 2026 | Pages: 1602 - 1605 | India
A Critical Analysis on the Scope of Related Party Transactions: A Possibility of Expansion
Abstract: Related party transactions can be legitimate and value-enhancing for a corporation, but they can also serve as a vehicle for illegitimate expropriation of corporate value by management or controlling shareholders. Related party transactions assume greater significance in a market context where there is high promoter ownership in group companies and a prevalence of listed companies under promoter-controlled groups. Abuses of related party transactions have been linked to negative consequences to minority investors in Indian companies, and have played a key part in some high-profile cases of corporate fraud. Currently, the Indian legal regime does not contain adequate safeguards for preventing abuse of related party transactions. This paper describes this problem in a comparative framework, examines disclosure regarding related party transactions contained in the annual reports of some of India's largest public companies, and makes several proposals for regulatory reform by looking into the scope of Section 188 of the Companies Act, 2013.
Keywords: related party dealings, corporate governance, minority investor protection, promoter control, regulatory reform
How to Cite?: Abhinav Viswanath, "A Critical Analysis on the Scope of Related Party Transactions: A Possibility of Expansion", Volume 15 Issue 3, March 2026, International Journal of Science and Research (IJSR), Pages: 1602-1605, https://www.ijsr.net/getabstract.php?paperid=SR26326174115, DOI: https://dx.dx.doi.org/10.21275/SR26326174115