Key Points of Sebi Appeal in Tata Steel Penalty Case
- The Supreme Court of India dismissed SEBI’s appeal against an appellate tribunal order.
- The penalty of ₹2 lakh imposed on Tata Steel due to disclosure lapses by Bhushan Steel was overturned.
- Tata Steel acquired Bhushan Steel in 2018 through the insolvency process and renamed it Tata Steel BSL.
- Justice Sanjiv Khanna upheld the tribunal’s December order.
- The penalty amount was too small for the market regulator to challenge it before the apex court.
- The question of law remains open on whether the penalty could be levied on the new management.
- The Securities Appellate Tribunal quashed the penalty order in February last year.
- The outcome sets an important precedent for future cases concerning penalties on new management following an acquisition.
Details of Sebi Appeal Tata Steel Penalty Case:
Tata Steel Emerges Victorious as SC Dismisses SEBI’s Appeal Overturned Penalty
On Friday, the Supreme Court of India dismissed the Securities and Exchange Board of India’s (SEBI) appeal against an appellate tribunal order. The tribunal had overturned a penalty of ₹2 lakh imposed on Tata Steel due to disclosure lapses by Bhushan Steel, which the former acquired. In 2018, Tata Steel took over debt-laden Bhushan Steel through the insolvency process and renamed it Tata Steel BSL.
Justice Sanjiv Khanna upheld the tribunal’s December order but stated that the penalty amount was too small for the market regulator to challenge it before the apex court. However, the question of law remains open on whether the penalty could be levied on the new management. This issue has been raised in various other appeals and is still pending before the Supreme Court.
Last year, in February, the Securities Appellate Tribunal (SAT) quashed the penalty order and held that Bhushan Steel had gone into insolvency in July 2017. Under the Insolvency and Bankruptcy Code (IBC), no penalty could be levied on the new management, which came into the picture on May 18, 2018.
Tata Steel can now breathe a sigh of relief with the Supreme Court’s decision to dismiss SEBI’s appeal. The outcome sets an important precedent for future cases concerning penalties on new management following an acquisition.
About Tata Steel:
Headquartered in Mumbai, Maharashtra, Tata Steel is an Indian multinational steel-making company that is a subsidiary of the renowned Tata Group. Its operations are primarily based in Jamshedpur, Jharkhand.
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