Market regulator Sebi turns the wrench on auditor appointments, RPT rules

Guardrails set to defend against ambiguity and strengthen compliance

The Securities and Exchange Board of India (Sebi) has unveiled a series of proposals aimed at reducing ambiguity in related party transaction (RPT) norms and improving transparency in secretarial audit reports.

 

These measures come amid allegations that several listed companies have engaged auditors with limited experience.

 

Sebi has recommended adding a monetary threshold alongside the existing 10 per cent standalone turnover threshold for subsidiaries seeking RPT approvals from listed companies’ audit committees. The proposed limits are ~1,000 crore for mainboard companies and ~50 crore for small and medium enterprises (SMEs) listed on exchanges.

 

For subsidiaries without financial records, the threshold