SC rejects SEBI plea for penalty on Tata Steel

27 Mar 2023 , 09:07 AM

The Securities and Exchange Board of India’s appeal against an appellate tribunal ruling that overturned a Rs 2 lakh fine levied on Tata Steel for disclosure violations by Bhushan Steel, which the firm had bought, was denied by the SC on Friday. 

Tata Steel acquired the insolvent Bhushan Steel in 2018 and changed the company’s name to Tata Steel BSL.

Justice Sanjiv Khanna upheld the tribunal’s December judgment but stated that the penalty was insufficient for the market regulator to appeal it to the Supreme Court. But, it left open the legal question of whether the new management  can face punishment for violations by companies that they hace acquired under IBC. The matter is currently before the SC and has been mentioned in a number of additional appeals.

Bhushan Steel entered insolvency in July 2017 and, as a result, the Securities Appellate Tribunal (SAT) concluded that no penalty could be imposed on the new management, which took over on May 18, 2018, in accordance with the IBC.

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