The Lowdown on Related Party Transactions by Directors or Managers in Public Companies

Though no longer surprising, corporate scandals can still involve the unexpected. Take the recent Carlos Ghosn and Nissan saga, for example. Aside from its sensational aspects, what is striking about the scandal was Ghosn’s alleged value-diverting related party transactions (“RPTs”) (see here and here). Though not unusual on their own, RPTs can be noteworthy when they occur between a director or manager (who is not a significant or controlling shareholder) and a company with a controlling shareholder. Ghosn was the chairperson of the board of directors of Nissan, which was controlled by another automobile company, Renault SA, (see hereRead more