Related Party Transactions: Governance and Disclosure

Introduction: Related party transactions are ordinary business arrangements with an extraordinary capacity for misuse. A company may buy goods from a promoter-controlled entity, lease office space from a director's partnership firm, or appoint a relative of a key managerial person to a position carrying financial benefit. None of this is automatically suspect. The concern begins when influence distorts judgment and value begins to move on terms that an unrelated party would never have...