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Why does a company have to ensure that any related party transaction requiring announcement must be “fair and reasonable”?

April 26, 2017announcement COMPANY ensure party requiring transaction

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Why does a company have to ensure that any related party transaction requiring announcement must be “fair and reasonable”?

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The purpose of such a provision is to ensure that related party transactions undertaken by the company are in the best interests of the company and not for the benefit of the related party or prejudicial to shareholders. The company should demonstrate to its J-Nomad that related party transactions are fair and reasonable. Also, if the company is unable to assess that a transaction is fair and reasonable, then it should consult with its J-Nomad.