The Securities and Exchange Board of India (SEBI) has issued a warning to billionaire Anil Agarwal led by Vedanta to carry out a related-party deal worth ₹1,407 crore without prior approval of the Audit Committee.
The company’s auditor and independent secretarial auditor marked the issue of related party transactions in the company’s annual report for fiscal year 21.
Referring to the opinion regarding the company carrying out related party transactions of Rs 1,407 crore without prior approval of the audit committee, SEBI, in a letter dated October 28, indicated that the company submitted that the said transaction was subsequently ratified (47 days later). ). The company also stated that the said transaction was carried out on a commercial basis and in the normal course of business.
However, the market regulator emphasized that Regulation 23(2) of the SEBI Regulations (LODR), 2015, stipulates that all related party transactions require prior approval from the Audit Committee.
With regard to the Secretary’s auditor’s note regarding the delay in disclosing the results of the Board of Directors meeting on October 3, 2020, the company confirmed that the delay was due to unforeseen circumstances and that it would ensure that it did not recur, according to a SEBI letter. “The reported cases of non-compliance are taken very seriously. You have been hereby warned and advised to ensure compliance with all applicable provisions of the SEBI Regulations. The regulator said in the letter that any such deviation in the future would be considered seriously for appropriate action to be taken to sand.
SEBI directed Vedanta to submit its letter to the company’s board of directors and to publish it on the exchanges. Vedanta, in a filing to the Securities Exchange, said the company’s board of directors at its October 29 meeting took note of the SEBI letter. The Board of Directors has advised the Company to ensure compliance with all applicable provisions.