Kalyani Group firms settle with SEBI over alleged misuse, diversion of funds

 The Securities and Exchange Board of India (SEBI) said three Kalyani Group companies including Kalyani Steels, have settled with it by paying ₹4.12 crore.

The companies were investigated for misuse and diversion of funds to various group companies which later impaired the funds. 

The SEBI investigated into the cases after receiving an examination report dated March 20, 2023 from National Stock Exchange (NSE) in respect of Kalyani Group companies.

“The said examination report observed three listed companies of Kalyani Group made investments in various promoter group companies having ‘nil’ operations, negative net worth and impaired these investments either in the same year or within two to three years of making these investments,” SEBI said in 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,” the order stated.

SEBI said it conducted an investigation into investments, loans and advances made by Kalyani Steels to related companies, including BF Utilities Ltd. It was a case of misuse and diversion of funds. The period of investigation was 2009-10 to 2021-22.

The investigation revealed that KSL made aggregate investments of about ₹219.5 crore in five group entities, namely DGM Realties Private Ltd. (₹136 crore), Lord Ganesha Minerals Private Ltd. (₹77.17 crore), Kalyani Mining Ventures Private Ltd. (₹4.02 crore), Kalyani Natural Resources Private Ltd. (₹1.32 crore), and Kalyani Mukand Ltd. (₹1.005 crore).

Of these, about ₹74.5 crore was subsequently impaired. SEBI noted that all of these investee entities qualified as related parties of KSL under by virtue of common control exercised by the promoters namely Baba Kalyani and Amit Kalyani. Also under the probe were BF Utilities Ltd. and Deepti R. Puranik, compliance officer and company secretary of KSL.

The investigation found several related party transactions which were in violation. Post that an adjudicating officer was appointed in April 2024.

In June 2024, Kalyani group “proposed to settle the instant proceedings initiated against them, without admitting or denying the findings of facts and conclusions of law, through a settlement order”.

Subsequently, a total of ₹4.12 crore was accepted by SEBI as the settlement amount. KSL, BFUL and Puranik remitted the settlement amount on February 12, 2026.

SEBI in the order said, “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 in respect to which the settlement order was passed against the Applicants.”