Audit Committee authority to void unratified related-party transactions, recommend to board, and require director indemnity. The amendment limits section 177 to listed public companies and adds provisos requiring the Audit Committee to recommend to the Board when it does not approve non related party transactions; it makes transactions entered without Audit Committee approval voidable if not ratified within a prescribed period, and requires the director who entered or authorised a transaction involving a related party to indemnify the company for losses. Transactions between a holding company and its wholly owned subsidiary are excluded from these provisos.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Audit Committee authority to void unratified related-party transactions, recommend to board, and require director indemnity.
The amendment limits section 177 to listed public companies and adds provisos requiring the Audit Committee to recommend to the Board when it does not approve non related party transactions; it makes transactions entered without Audit Committee approval voidable if not ratified within a prescribed period, and requires the director who entered or authorised a transaction involving a related party to indemnify the company for losses. Transactions between a holding company and its wholly owned subsidiary are excluded from these provisos.
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