Disclosures do not bind listed firms or create liabilities, Sebi tells HC

The Securities and Exchange Board of India (Sebi) has submitted to the Bombay High Court that disclosures by listed companies do not bind them or create liabilities, in response to petitions pertaining to the Kirloskar group firms.

 

The market regulator stated that “mere disclosure of any agreement by a listed entity shall not itself mean that the company admits such agreement as binding itself or as having an impact on its management or control, or imposing any restriction”.

 

Five entities of the Kirloskar group — Kirloskar Oil Engines (KOEL), Kirloskar Ferrous Industries, Kirloskar Pneumatic Company, GG Dandekar Properties, and Kirloskar Industries — had individually filed writ petitions challenging the disclosure-related regulations by Sebi. 

 

The matter pertains to a direction by the market regulator in December 2024, directing Kirloskar Oil Engines to disclose a Deed of Family Settlement (DFS) entered in September 2009 to the stock exchanges under the Listing Obligation and Disclosure Requirements (LODR) Regulations.

 

The Bombay High Court on Tuesday allowed the companies to withdraw their petition.

 

The court stated that the proceedings before the Securities Appellate Tribunal (SAT) will be “decided on the merits”.

 

“This outcome is a significant relief not just for us but for the broader corporate community. It provides much-needed clarity that listed companies cannot be forced into obligations arising from agreements they never entered into, signed, or ratified,” said a spokesperson on behalf of the petitioners.