SEBI disposes case against Kalyani Steels, Deepti R Puranik and BF Utilities after Rs.4.12 crore settlement

SEBI disposes case against Kalyani Steels, Deepti R Puranik and BF Utilities after Rs.4.12 crore settlement

The three entities were investigated after a 2023 report by the National Stock Exchange

The Securities and Exchange Board of India (SEBI) has settled adjudication proceedings against Kalyani Steels, its former compliance officer, Deepti R Puranik, and BF Utilities, for alleged lapses in approvals and disclosures on related-party transactions (RPT).

While accepting a Rs.4.12 crore settlement from the three entities, SEBI ended the investigation for the Financial Year 2010 to 2022.

The major settlement amount of Rs.2.8 crore, was paid by Kalyani Steels, while BF Utilities paid Rs.36.28 lakh and Deepti Puranik paid Rs.95.55 lakh.

The matter pertains to a March 2023 report by the National Stock Exchange (NSE) flagging investments by the Kalyani Group companies in promoter-linked entities having weak financials, including nil operations and negative net worth.

Many of the investments were made within a short span, raising fund utilization and governance concerns.

On investigating, the market regulator found that Kalyani Steels entered multiple related-party transactions, including investments in preference shares, debentures, trade advances, and equity purchases. All this was done without obtaining mandatory approvals from its audit committee or shareholders, as required under the listing regulations.

SEBI also noted the companies’ failure to place RPT summaries before the audit committee and lapses in quarterly disclosures.

Similarly, approval and disclosure failures were observed in BF Utilities’ transactions with Kalyani Steels.

The regulator also held Deepti Puranik accountable for not ensuring regulatory compliance, citing violations of disclosure and governance obligations under the Listing Obligations and Disclosure Requirements (LODR) Regulations.