Enhance RPT rules to protect minority holders

RULES governing related party transactions (RPTs) here could be enhanced to better protect minority investors who end up being disadvantaged from such transactions, says a new study on RPTs here.

The study looked at the most common type of RPTs here, and compared the rules and laws governing RPTs with those of neighbouring and major jurisdictions. It examined Singapore listed companies between June 2011 and June 2012, and the exercise was led by associate professor Mak Yuen Teen with the Department of Accounting at NUS Business School and Lee Sze Yeng, a partner with KPMG in Singapore.

"RPTs are widely considered to be an important source of governance risk. This is particularly so in companies with substantial and controlling shareholders who may be their founders, their families or the state," their report, The Ties That Bind, said.