- Thursday, April 25, 2024
By: Chandrashekar Bhat
INDIAN capital market regulator SEBI has warned billionaire Anil Agarwal’s Vedanta Ltd for executing related-party transactions of Rs 14.07 billion (£137.3 million) without prior approval of its audit committee.
In a warning letter, which Vedanta disclosed to stock exchanges, the regulator said it will take action if such actions are repeated in the future.
The mining conglomerate’s independent auditors had in the firm’s annual report for the fiscal year 2020-21 flagged related-party transactions.
“With regard to the qualified opinion in respect of the company executing related party transactions worth Rs 1,407 crore (£137.3 million) without prior approval of the audit committee, the company has submitted that the said transaction was ratified later (after a period of about 47 days),” SEBI said in the letter on Thursday (28).
Without disclosing the nature of the transaction, the company stated that it was done at an “arm’s length” and in the ordinary course of business.
“In this regard, attention may be drawn to the regulation… which states that all related party transactions shall require prior approval of the audit committee,” SEBI said. “Accordingly, the submission of the company that the transactions were done at arm’s length distance is not tenable.”
On the auditor’s observation over delay in disclosure of the outcome of the board meeting of October 3, 2020, the company submitted that the delay was due to unforeseen circumstances and that it will ensure that the same is not repeated.
“The aforesaid non-compliances are viewed seriously. You are hereby warned and advised to ensure compliance with all applicable provisions of SEBI Regulations,” the regulator said in the letter.
“Any such aberration in future would be viewed seriously and appropriate action would be initiated.”
SEBI asked Vedanta to place its letter before the company’s board of directors and disseminate the same to stock exchanges.
Vedanta in the filing said that the firm’s board at its meeting held on October 29 took note of the SEBI letter.
The board “has advised the company to ensure adherence to all applicable provisions,” it said. “We would also like to state that the company has always been meticulous in complying with all the provisions of the Companies Act and SEBI Regulations and will continue to do so.”
(PTI)
