New Delhi, February 23 Three entities, including Kalyani Steels Ltd (KSL), settled with the market regulator, Sebi, on Monday a case of alleged violation of disclosure and related-party transaction norms after paying a total of Rs 4.12 crore.
KSL is part of the Kalyani group, led by Babasaheb Neelkanth Kalyani.
The order came after the applicants (Kalyani Steels Ltd, BF Utilities, and Deepti R Puranik) proposed to settle the proceedings initiated against them, "without admitting or denying the findings of fact and the conclusions of law."
The Securities and Exchange Board of India (Sebi) examined the financial transactions of the Kalyani group of companies, following a report from NSE dated March 20, 2023, which flagged possible lapses in investments made by group entities.
These investments were allegedly made in entities with 'nil' operations, negative net worth, etc., and these investments were either impaired in the same year or within two to three years of making them.
NSE further observed that the utilisation of the funds received by the investee companies also appeared suspicious, as these companies had made multi-layered investments in potentially indirectly linked entities situated in India or abroad, in the name of various projects.
Sebi investigated the matter, and the period of investigation was from FY 2009-10 to FY 2021-22.
The investigation revealed that Kalyani Steels Ltd (KSL) had entered into several related-party transactions without prior approval from the audit committee or shareholders, Sebi said.
It was also alleged that some transactions were not disclosed in the quarterly disclosure of the material related-party transactions entered into with the stock exchanges, according to the order.
Similar lapses were observed in the case of BF Utilities, while Deepti R Puranik, the former compliance officer of KSL, was held accountable for oversight failures in ensuring adequate disclosure compliance.
Subsequently, Sebi issued a show cause notice on May 16, 2024, to the three entities for the alleged violations.
Accordingly, the applicants filed revised settlement terms, which were approved by Sebi. As part of the settlement, Kalyani Steels Ltd remitted Rs 2.8 crore, Puranik paid Rs 95.55 lakh, and BF Utilities settled for Rs 36.28 lakh on February 12, 2026, and was confirmed by Sebi.
"Therefore, in view of the acceptance of the settlement terms... the adjudication proceedings initiated against the applicants on May 16, 2024, are disposed of in terms of," Sebi's adjudicating officer Jai Sebastian said in the order.
However, the regulator clarified that it retains the right to reopen the matter if it finds that the settlement terms were breached or if any misrepresentation was made during the process.