Kalyani Steel, others settle related-party lapse case with SEBI for Rs 4 crore

SEBI’s investigation, covering FY10 to FY22, alleged that Kalyani Steels entered into multiple related-party transactions without obtaining prior approvals from the audit committee and, in certain cases, shareholders.

• Kalyani Steels, BF Utilities, and ex-officer settle case with SEBI
• Firms paid Rs 4.12 crore to settle for governance and disclosure lapses
• SEBI may reopen case if settlement terms are breached

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Market regulator Securities and Exchange Board of India (SEBI) has approved the settlement application of Kalyani Steels Limited, BF Utilities Limited, and former compliance officer Deepti R. Puranik over alleged governance and disclosure lapses linked to related-party transactions.

SEBI had initiated the adjudication proceedings against them. The regulator's action follows an examination report by the NSE that flagged investments by Kalyani Group companies into group-linked entities with weak financials and subsequent impairments. The exchange had also raised concerns over the utilisation of funds by investee entities. As per the settlement order, “NSE further observed that the utilization 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 (PILE) situated in India or abroad in the name of various projects”.

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SEBI’s investigation, covering FY10 to FY22, alleged that Kalyani Steels entered into multiple related-party transactions without obtaining prior approvals from the audit committee and, in certain cases, shareholders. The regulator also flagged failures to place transaction summaries before the audit committee and lapses in quarterly disclosures of material related-party dealings. The transactions involved investments and advances to entities such as DGM Realties, Lord Ganesha Minerals, Kalyani Mining Ventures, and other promoter-linked firms.

Separate allegations were levelled against BF Utilities for not securing audit committee and shareholder approvals and failing to disclose material related-party transactions in a timely manner. The former compliance officer of Kalyani Steels was accused of not ensuring adherence to regulatory requirements under listing norms during the relevant period.

Pending adjudication, the applicants opted for settlement under SEBI’s settlement framework without admitting or denying the findings on June 03, 2024. Following deliberations with SEBI’s internal committee and a recommendation from the High-Powered Advisory Committee, the regulator accepted revised settlement terms.

Under the settlement, Kalyani Steels paid Rs 2.80 crore, BF Utilities Rs 36.28 lakh, and Deepti R. Puranik Rs 95.55 lakh. The payments were remitted on February 12, 2026, after which SEBI disposed of the proceedings.

The settlement order, issued today by Adjudicating Officer Jai Sebastian, brings closure to the adjudication process.

However, SEBI retained the right to revive proceedings if any representations made during settlement are found to be untrue or if settlement conditions are breached.

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