Vedanta Gets SEBI’s Warning Letter on Lax Compliance
(Bloomberg) -- Vedanta Ltd. said it received a warning letter from India’s market regulator that flagged non-compliance in some disclosures, prompting the firm led by billionaire Anil Agarwal to say it has been meeting all regulatory requirements.
The Securities and Exchange Board of India on Oct. 28 queried the company on a related party transaction worth 14.07 billion rupees ($188 million) that didn’t receive prior approval from the board’s audit committee, Vedanta said in an exchange filing Saturday.
Vedanta had said that the related party transaction was done “at an arm’s length distance and in the ordinary course of business” and received the audit committee’s approval a few weeks later. SEBI said rules state that such transactions require pre-approval and the company’s reasoning was “not tenable.”
The regulator also asked about a delay in disclosing the outcome of a board meeting held on Oct. 3 last year. Vedanta said it was “due to unforeseen circumstances” and won’t be repeated.
The “non-compliances are viewed seriously,” SEBI said in its letter, adding that “any such aberration in future” may trigger regulatory action.
Vedanta’s board, which met on Oct. 29, advised the company to “ensure adherence to all applicable provisions,” according to the filing.
Vedanta said it has “always been meticulous in complying with all the provisions of the Companies Act and SEBI Regulations and will continue to do so.”
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