Ensure Better Regulatory Compliance: SEBI Tells Vedanta
The Securities and Exchange Board of India pulled up Vedanta Ltd. for non-compliance with the regulator's listing obligations and disclosure requirements, pertaining to a related-party transaction that was carried out in the financial year 2020-21.
In a letter to the company on Oct. 28, SEBI noted that Vedanta's annual report for FY21 contains the qualified opinion of the independent auditor and secretarial auditor on the company executing a related-party transaction worth Rs 1,407 crore without securing the prior approval of the audit committee of its board of directors, as was required by SEBI's LODR regulations. The audit committee gave its approval approximately 47 days after the date of the transaction.
Finding Vedanta's submission that the transaction was done at arm's length to be untenable, SEBI advised the company to ensure compliance with all applicable provisions of SEBI regulations and warned that appropriate action would be initiated against any such aberration in the future. SEBI's letter does not mention a monetary penalty for the violation.
Subsequently, the Vedanta board met on Oct. 29 and took cognizance of the SEBI letter.