Sebi penalises erstwhile Essar Steel India for disclosure lapses

Markets watchdog Sebi on Monday penalised erstwhile Essar Steel India Ltd, which is now known as ArcelorMittal India Pvt Ltd, for lapses in making disclosures related to issuance of non-convertible debentures.

However, the imposition of Rs 2 lakh fine on the entity would be subject to the outcome of appeals by Sebi in some other cases related to insolvency proceedings before the Supreme Court.

The appeals were filed by Sebi against the Securities Appellate Tribunal (SAT) ruling wherein it was held that the regulator cannot initiate action against a company whose resolution plan has already been approved.

The company was acquired through an insolvency resolution process. Its management was transferred to ArcelorMittal India Pvt Ltd in December 2019.

While Essar Steel India Ltd was admitted to insolvency proceedings in August 2017, the alleged violations related to disclosures happened during the period from December 2015 to March 2019.

In a 35-page order, Sebi has imposed a fine of Rs 2 lakh on Essar Steel India Pvt Ltd for the disclosure lapses.

While determining the penalty, the regulator noted that there is no evidence to indicate that violations were repetitive in nature which is taken into consideration as a mitigating factor.

"... the enforcement of this order shall be subject to the outcome of the appeals in Monnet Ispat & Energy Ltd, Alok Industries Ltd and and Raj Oil Mills Ltd before the Hon'ble Supreme Court," Sebi said in the order on Monday.