Economy

Finance Ministry opposes Sebi's restrictions on royalty paid by listed firms, says report

Updated : April 26, 2019 08:38 AM IST

The market regulator delayed the implementation of the royalty rule to July from April following Sebi's opposition, the report said.

Royalty payments are made by listed companies to their overseas parents for the use of brands and technologies.

Finance Ministry opposes Sebi's restrictions on royalty paid by listed firms, says report

The Ministry of Finance is likely to have opposed the Securities and Exchange Board of India’s (Sebi) move to impose restrictions on royalty payments by listed companies, The Economic Times reported.

Royalty payments are made by listed companies to their overseas parents for the use of brands and technologies.

The market regulator delayed the implementation of the rule to July from April following Sebi's opposition, the report said citing unidentified people with knowledge of the matter.

Sebi wants to make the approval of minority shareholders mandatory for royalty payments by listed companies that exceed two percent of the firm's annual turnover to raise corporate governance standards, said the report.

The finance ministry claimed that these limitations will discourage companies from investing in India, according to the minutes of the Sebi board meeting on March 27 that was accessed by the newspaper.

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