Kalyani Group firms settle Sebi case for Rs 4.12 crore after NSE report
India Today
Kalyani Group's two listed companies have settled Sebi proceedings over alleged fund diversion, paying over Rs 4.12 crore without admitting guilt. The regulator's probe revealed suspicious investments and multi-layered transactions involving related parties.
Two listed companies of the Kalyani Group have settled proceedings with the Securities and Exchange Board of India after allegations of misuse and diversion of funds to related parties, with the regulator accepting more than Rs 4.12 crore as settlement amount.
In an order dated February 23, Sebi detailed how Kalyani Steels Limited and BF Utilities Ltd were examined for violations involving related party transactions. The matter originated from an examination report dated March 20, 2023 submitted by the National Stock Exchange of India Limited.
According to the Sebi order, the NSE report observed that three listed Kalyani Group companies had made investments in various promoter group firms with “nil” operations and negative net worth. Several of these investments were impaired either in the same year or within two to three years.
“The utilisation 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 situated in India or abroad in the name of various projects,” the order said.
Sebi’s investigation, covering the period from 2009-10 to 2021-22, examined investments, loans and advances made by Kalyani Steels to related entities, including BF Utilities. It found that Kalyani Steels made aggregate investments of approximately Rs 219.5 crore in five group entities.
These included DGM Realties Private Limited with Rs 136 crore, Lord Ganesha Minerals Private Limited with Rs 77.17 crore, Kalyani Mining Ventures Private Limited with Rs 4.02 crore, Kalyani Natural Resources Private Limited with Rs 1.32 crore and Kalyani Mukand Limited with Rs 1.005 crore. Of this, around Rs 74.5 crore was later impaired.
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