25% companies pay over 20% of annual profits in royalty to related parties

IN a major finding, markets watchdog Sebi has found that as many as a quarter of the listed companies its study analysed has been paying over 20% of their annual profits to their related parties (RPs), while half of them did so at the cost of paying dividends and a tenth of them did so even while making losses.

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In a statement on Thursday, the Sebi said its study is based on 233 listed companies across sectors during the decade ending FY23. Some of these companies paid royalty, amounting to under 5% of their turnover to their RPs during the 10-year period from FY14 to FY23.