Kalyani Group Firms Settle SEBI Case for ₹4.12 Crores Over Related Party Transactions

Two listed companies belonging to the Kalyani Group have settled regulatory proceedings with the Securities and Exchange Board of India (SEBI) after allegations related to fund diversion and questionable related-party transactions. The regulator accepted a settlement amount exceeding ₹4.12 crore, while the companies resolved the matter without admitting or denying any wrongdoing.

The case involved Kalyani Steels Limited and BF Utilities Ltd, both linked to industrialists Baba Kalyani and Amit Kalyani. SEBI initiated proceedings after reviewing an examination report submitted by the National Stock Exchange of India (NSE) on March 20, 2023.

NSE Report Flagged Investments in Weak Entities

According to the regulatory order, the NSE report observed that multiple listed companies within the group had invested in promoter-linked entities that showed “nil operations” and negative net worth. Several of these investments were impaired either within the same financial year or shortly thereafter.

The regulator noted that the utilisation of funds by these entities appeared suspicious. Funds were reportedly routed through multi-layered investments into potentially indirectly linked entities in India and overseas under various project names.

₹219.5 Crore Investments Under Examination

SEBI’s investigation covered the period from FY 2009–10 to FY 2021–22 and examined investments, loans, and advances made by Kalyani Steels to related entities, including BF Utilities.

The probe found that Kalyani Steels invested approximately ₹219.5 crore across five group entities:

• ₹136 crore in DGM Realties Pvt Ltd

• ₹77.17 crore in Lord Ganesha Minerals Pvt Ltd

• ₹4.02 crore in Kalyani Mining Ventures Pvt Ltd

• ₹1.32 crore in Kalyani Natural Resources Pvt Ltd

• ₹1.005 crore in Kalyani Mukand Ltd

Out of the total investments, around ₹74.5 crore was later impaired.

SEBI determined that these entities qualified as related parties due to common control exercised by Baba Kalyani and Amit Kalyani. BF Utilities and the compliance officer and company secretary of Kalyani Steels were also examined as part of the proceedings.

Settlement Without Admission of Liability

An adjudicating officer was appointed in April 2024. In June 2024, the companies filed a settlement application proposing to resolve the matter without admitting or denying the findings.

SEBI accepted the settlement, and the payment of ₹4.12 crore was remitted on February 12, 2026.

The settlement order clarified that the relief is not absolute. The regulator retains the authority to reopen or initiate proceedings if any representation is found to be false, settlement conditions are breached, or discrepancies emerge later.

The case highlights regulatory scrutiny over related-party transactions and financial transparency, reinforcing the importance of corporate governance and disclosure standards in India’s capital markets.