Kalyani Steels, 2 others pay Rs 4.12 cr to settle market norm violation case with Sebi

Three entities, including Kalyani Steels Ltd KSL, on Monday settled with market regulator Sebi a case of alleged violation of disclosure and related-party transaction norms after paying Rs 4.12 crore collectively. The order came after the applicants Kalyani Steels Ltd, BF Utilities and Deepti R Puranik proposed to settle the instant proceedings initiated against them, without admitting or denying the findings of facts and conclusions of law.

Three entities, including Kalyani Steels Ltd (KSL), on Monday settled with market regulator Sebi a case of alleged violation of disclosure and related-party transaction norms after paying Rs 4.12 crore collectively. KSL is a part of Babasaheb Neelkanth Kalyani-led Kalyani group. The order came after the applicants (Kalyani Steels Ltd, BF Utilities and Deepti R Puranik proposed to settle the instant proceedings initiated against them, ''without admitting or denying the findings of facts and conclusions of law''. The Securities and Exchange Board of India (Sebi) examined 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 impaired these investments either in the same year or within two to three years of making these investments. NSE further observed that the utilisation of the funds received by the investee companies also appeared suspicious, as there were multi-layered investments by these companies in potentially indirectly linked entities situated in India or abroad in the name of various projects. The markets watchdog investigated the matter, and the period of investigation was 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, the regulator said. It was also alleged that some transactions were not disclosed in the quarterly disclosure of the material related party transactions entered to the stock exchanges, according to the order. Similar lapses were observed in the case of BF Utilities, while the former compliance officer of KSL, Deepti R Puranik, was held accountable for oversight failures in ensuring adequate disclosure compliance. Thereafter, 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 with Rs 36.28 lakh on February 12, 2026, and was confirmed by Sebi. ''Therefore, in view of the acceptance of the settlement terms... the instant adjudication proceedings initiated against the applicants dated 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.

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