SEBI Disposes Proceedings Against Kalyani Steels, BF Utilities In ₹4.12 Crore Settlement

The Securities and Exchange Board of India has recently passed a settlement order disposing of adjudication proceedings initiated against Kalyani Steels Limited, BF Utilities Limited, and Deepti R Puranik, former Compliance Officer.

The proceedings arose from an examination report of National Stock Exchange highlighting suspicious investment patterns within certain Kalyani Group companies. NSE observed that three listed companies of Kalyani group had made investments in promoter group companies with nil operations or negative net worth, followed by impairment of those investments within a short period. The utilisation of funds by investee entities was also noted to be suspicious.

Based on these findings, SEBI initiated an investigation. The regulator alleged multiple lapses, including failure to obtain prior approval of audit committee, not taking shareholder approval for material related party transactions, and failure to make disclosures. Allegations were also made against the Compliance Officer for failure to ensure regulatory compliance.

Pending adjudication proceedings, the noticees filed settlement applications without admitting or denying the findings. Pursuant to the meetings with SEBI's Internal Committee, revised settlement terms were filed.

Subsequently, SEBI's High Powered Advisory Committee considered the settlement proposal and recommended settling the matter upon payment of Rs.4.12 crores.

The noticees remitted settlement amounts, following which SEBI disposed of the adjudication proceedings against Kalyani Steels Limited, BF Utilities Limited, and the former Compliance Officer.

SEBI clarified that the settlement order is without prejudice to its right to restore proceedings in the event of misrepresentation or breach of settlement conditions.