The Changed Related-Party Map
The transferee’s related-party map is based on its directors, KMP, and shareholders. After the scheme, the transferor’s promoters and directors may join the transferee’s board or become significant shareholders, and the transferor’s group entities may become the transferee’s related parties. The map must be refreshed as on the effective date.
The Approval Gap
The transferor’s RPT approvals for pre-merger transactions do not automatically extend to the transferee’s post-merger transactions with the same parties. The transferee must obtain fresh approvals under Section 188 and, where applicable, the audit committee’s omnibus approval. The scheme should not be used as a substitute for the RPT approval process.
The MCA Circular on Past Contracts
The MCA’s General Circular No. 30/2014 clarifies that contracts entered into before the commencement of Section 188, after complying with the predecessor provision, do not require fresh approval until the expiry of the original term. The circular does not apply to post-merger contracts or to modifications. The transferee should rely on the circular only for legacy contracts that fall within its exact terms.
Call to Action: For post-merger RPT mapping, Section 188 approval strategy, or audit committee omnibus framework, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.