Two listed companies of the Kalyani Group, controlled by industrialists Baba Kalyani and Amit Kalyani, 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 stemmed from an examination report dated March 20, 2023 submitted by the National Stock Exchange of India Limited.
NSE REPORT FLAGGED ‘NIL OPERATIONS’ FIRMS
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.
INVESTMENTS WORTH Rs 219.5 CRORE UNDER SCRUTINY
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.
Sebi observed that the investee entities qualified as related parties due to common control exercised by Baba Kalyani and Amit Kalyani. BF Utilities and Deepti R Puranik, compliance officer and company secretary of Kalyani Steels, were also examined.
SETTLEMENT WITHOUT ADMISSION OF GUILT
An adjudicating officer was appointed in April 2024. In June 2024, the companies proposed to settle the proceedings “without admitting or denying the findings of facts and conclusions of law” through a settlement order.
Sebi accepted Rs 4.12 crore as settlement. The amount was remitted on February 12, 2026 by Kalyani Steels, BF Utilities and Puranik.
The February 23 settlement order makes it clear that the relief is not absolute. “This Settlement Order is, however, without prejudice to the right of Sebi to take actions under regulation 28 of the Settlement Regulations, including restoring or initiating the proceedings,” it said.
The regulator added that proceedings can be revived if any representation made during settlement is later found to be untrue, if conditions of undertakings are breached, or if discrepancies emerge in the settlement terms.
The Kalyani Group has been contacted for its response.
