Suppose market regulator requires that related party transaction (transaction between two related parties/firms that have preexisting...

  

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Suppose market regulator requires that related party transaction (transaction between two related parties/firms that have preexisting business relationship) does not need prior approval of the shareholders of the listed firms if the transaction amount is less than 1,000 crore or 10 percent of the annual turnover of the company. a) What kind of problem you can see here and why? b) Do you support the threshold of the transaction? Suppose market regulator requires that related party transaction (transaction between two related parties/firms that have preexisting business relationship) does not need prior approval of the shareholders of the listed firms if the transaction amount is less than 1,000 crore or 10 percent of the annual turnover of the company. a) What kind of problem you can see here and why? b) Do you support the threshold of the transaction?

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There can be a problem of potential conflicts of int... View the full answer