Kalyani Steels, BF Utilities settle Sebi RPT case for ₹4.12 crore

Sebi has settled proceedings against Kalyani Steels, BF Utilities and a former compliance officer over multiple lapses in approvals and disclosures related to related-party transactions

The Securities and Exchange Board of India (Sebi) has settled adjudication proceedings against Kalyani Steels, BF Utilities, and the former compliance officer of Kalyani Steels in a matter pertaining to alleged lapses in approvals and disclosures around related-party transactions (RPT). 

 

The regulator accepted a total settlement amount of ₹4.12 crore from the three entities, bringing to a close an investigation covering the period from FY10 to FY22, according to a settlement order. 

 

Kalyani Steels paid the bulk of the settlement amount of ₹2.8 crore, while BF Utilities paid ₹36.28 lakh. Former Company Secretary and Compliance Officer Deepti R Puranik paid ₹95.55 lakh.

 

 

The case originated from an examination report submitted by the National Stock Exchange in March 2023, which flagged investments made by Kalyani group companies in promoter-linked entities with weak financials, including nil operations and negative net worth. Several of these investments were impaired within a short period, raising concerns around fund utilisation and governance.

 

Sebi’s investigation found that Kalyani Steels had entered into multiple related-party transactions — such as investments in preference shares, debentures, trade advances, and equity purchases — without obtaining mandatory prior approvals from its audit committee or shareholders, as required under the listing regulations. The regulator also noted failures in placing summaries of related-party transactions before the audit committee and lapses in quarterly disclosures.

 

Similar approval and disclosure failures were found in BF Utilities’ transactions with Kalyani Steels. Sebi also held the then compliance officer accountable for not ensuring regulatory compliance, citing violations of disclosure and governance obligations under the Listing Obligations and Disclosure Requirements (LODR) Regulations.