New Delhi: Capital markets regulator SEBI warns billionaire Anil Agarwal’s Vedanta Ltd for execution ₹1,407 crore of related party transactions without the prior approval of the Audit Committee.
In a warning letter, which Vedanta conveyed to stock exchanges as per Sebi’s directions, the regulator said it will take action if such action is repeated in future.
Independent auditors of the mining group had flagged related party transactions in the firm’s annual report for the financial year 2020-21.
“With respect to qualified opinion as to the company executing the related party transaction ₹1,407 crore without the prior approval of the Audit Committee, the company has submitted that the said transaction was subsequently confirmed (after a period of approximately 47 days),” SEBI said in its October 28 letter.
Without disclosing the nature of the transaction, the company said the transaction was done at an arm’s length and in the normal course of business.
SEBI said, “In this regard, attention may be drawn to regulation 23(2) of the SEBI (LODR) Regulations, 2015, which states that all related party transactions shall require prior approval of the Audit Committee. ” “Accordingly, the company’s contention that the transactions were carried out at arm’s length is not valid.”
On the auditor’s observation on the delay in disclosure of the result of the Board meeting dated October 3, 2020, the Company submitted that the delay was due to unforeseen circumstances and would ensure that it is not repeated.
“The above non-compliances are taken seriously. You are hereby cautioned and advised to ensure compliance of all applicable provisions of SEBI Regulations,” the regulator said in the letter. “Any such disturbances in future will be taken seriously and appropriate action will be initiated.”
SEBI asked Vedanta to place its letter before the company’s board of directors and circulate it on the stock exchanges.
Vedanta said in the filing that the firm’s board, in its meeting held on October 29, took note of Sebi’s letter.
The board has “advised the company to ensure compliance of all applicable provisions,” it said. “We would also like to state that the company has always exercised due diligence in complying with all the provisions of the Companies Act and SEBI Regulations and will continue to do so.”
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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