Understanding Related Party Transaction Red Flags

A foundation concept course for investors who want to catch governance trouble early, commerce and finance students heading into forensic work, and compliance aspirants. Related party transactions are deals between a listed company and people or entities close to its promoters, and in India they are the single most common channel through which minority shareholders lose value. The course explains who counts as a related party, why most related party deals are perfectly normal, and how the Companies Act, SEBI LODR and Ind AS 24 control them through audit committee approval, materiality thresholds and shareholder votes. It then walks through the classic red flags one by one: loans and advances to promoter entities, royalties and brand fees, odd-priced purchases and sales with group companies, asset transfers, guarantees, and undisclosed or shell related parties. Real Indian cases, from Satyam and Maytas to DHFL, Fortis and Zee, show how each pattern played out. You finish with simple sizing ratios, a guide to reading shareholder votes and auditor remarks, and a ten minute red flag check you can run on any NSE or BSE listed company.