Claiming the 'JSW' brand belongs to a private company owned by promoter and Chairman Sajjan Jindal's wife, Sangita, JSW Steel has proposed to pay a substantial sum annually for use and promotion of the brand name. The firm is going to seek its shareholders' approval for this related-party transaction at its annual general meeting on July 31.According to the terms of the deal, the annual recurring payment, linked to the turnover of the company, works out to around Rs 125 crore for the current year and is likely increase in subsequent years. The company says paying for brand promotion is an accepted practice among conglomerates and that the transaction is at an arm's length. But corporate governance experts are calling the deal, which is to take effect from April 1, 2014, "abusive". They say the brand has evolved over the years and cannot suddenly become the private property of promoters.In its notice for the annual general meeting (AGM), the company informed shareholders that the 'JSW' brand was owned by JSW Investments Pvt Ltd (JSWIPL), a promoter group company. "Sangita Jindal, wife of Mr Sajjan Jindal (promoter and chairman and managing director of the company), holds directly and through nominees 2,049,880 shares, representing 99.99 per cent of the total equity share capital of JSWIPL," it said.Encouraged by the recent success of Bengaluru FC, a football club sponsored by the company, JWISPL wants to promote the brand. For this, it wants a revenue-linked levy from all group companies. "Instead of taking such initiatives on an ad-hoc basis and on a standalone company basis, a professional approach with a structural set-up or framework has to be put in place to sustain the brand image. The company has been informed, given the size and scale of the JSW group, JSWIPL plans to nurture the brand by adopting the best global practices."The company said a levy in the range of 0.15-0.50 per cent of the consolidated total operating income as brand licence fee was being charged by brand owners in various groups for brand usage."So, it is proposed to pay a brand license fee of 0.25 per cent of the consolidated net turnover of the company to JSWIPL, with effect from April 1, 2014, payable quarterly," it said in the notice.In an emailed response to queries from Business Standard, a spokesperson for JSW Steel said: "To ensure consistency in brand usage, uniformity in performance standards among various companies using the brand, appropriate framework has to be in place through governance structure, code of conduct and a business-excellence model. The brand owner has to be vigilant and needs to monitor that the brand name is not misused and the value of the brand is not diluted. Accordingly, JSW Investment Ltd, the brand owner since inception, has carried out a study to adopt best practices in managing the brand architecture, benchmarking with both Indian and international conglomerates. To sustain and improve the brand value and to bestow the tangible and intangible benefits in the longer term, a sustainable corporate-branding campaign involving substantial expenditure has to be done on a consistent basis - to disseminate the idea, knowledge, information and core values of the brand through a systematic campaign."