Mumbai : The Securities Appellate Tribunal (SAT) on Wednesday set aside the Securities and Exchange Board of India’s (SEBI) March order on ArcelorMittal Nippon Steel India Ltd., Sebi’s listing obligations and disclosure requirements, for not making required disclosures under the regulations. was fined for.
ArcelorMittal was earlier known as Essar Steel India Limited.
This comes after the regulator in its March 28 order imposed a fine of 2 lakh on ArcelorMittal for violating SEBI norms.
A bench headed by Justice Tarun Agrawal said, “The impugned order dated March 28, 2022 cannot be maintained and stands set aside. Appeal is allowed without any order regarding cost. However, it will be open to the respondent SEBI to initiate proceedings against the entities concerned for the relevant period.”
In October 2019, the adjudicating officer of SEBI had issued a show-cause notice to ArcelorMittal asking why an investigation should not be initiated and penalty should not be imposed on him for non-disclosure relating to issuance of non-convertible debentures. 2011.
imposition of However, at that time a fine of Rs 2 lakh was imposed on the company, subject to the outcome of an appeal by SEBI in certain other matters relating to insolvency proceedings before the Supreme Court.
Sebi’s appeal was against SAT’s decision that the regulator cannot initiate action against a company whose resolution plan has already been approved.
After the completion of the corporate insolvency resolution process, Essar (now ArcelorMittal) was acquired. In December 2019, Essar’s management was then taken over by ArcelorMittal India Pvt Ltd.
The top court also upheld the NCLT’s decision on approval of the resolution plan.
Essar Steel was admitted to bankruptcy proceedings in August 2017, although the alleged disclosure violations reportedly took place between December 2015 and March 2019.
“…the enforcement of this order shall be subject to the outcome of appeals before the Hon’ble Supreme Court in Monnet Ispat & Energy Limited, Alok Industries Limited and Raj Oil Mills Limited,” SEBI had said in the March order. ,
SAT referred to its earlier order in Monnet Ispat v SEBI that “…once a resolution plan is approved, it is applicable to all creditors including the respondent, government and local authorities under Section 31(1) of the IBC.” It is not open to the respondent to issue a show cause notice or to pass an order of adjudication and punishment on the appellant. As a result, the impugned order cannot be maintained and is set aside. Accordingly, the appeal is allowed without any order in respect of the cost.”
On the other hand, counsel for SEBI had argued that the decisions of this tribunal were limited to the period only till the petition was admitted by the NCLT, but the resolution professional was required to comply with the LODR provisions during the pendency of the resolution plan. And in case of non-compliance, the resolution professional will be responsible for non-compliance with the provisions.
In this regard, learned counsel relied upon a circular dated 03rd January, 2018 issued by the Insolvency and Bankruptcy Board of India, a copy of which was laid before the Tribunal. However, the details of the circular were not mentioned in the order.