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Tribunal quashes Sebi order on non-disclosures by  ArcelorMittal

Market regulator Sebi had imposed a fine of  ₹2 lakh on ArcelorMittal for violation of regulations. (REUTERS)Premium
Market regulator Sebi had imposed a fine of 2 lakh on ArcelorMittal for violation of regulations. (REUTERS)

The impugned order dated 28 March cannot be sustained and is quashed. The appeal is allowed with no order as to costs. However, it will be open to the respondent Sebi to initiate proceedings for the relevant period against the relevant entities, the SAT said

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MUMBAI : The Securities Appellate Tribunal on Wednesday quashed the Securities and Exchange Board of India’s (Sebi’s) order imposing a fine on ArcelorMittal Nippon Steel India Ltd (formerly Essar Steel) for violating listing obligations and disclosure norms.

“The impugned order dated 28 March cannot be sustained and is quashed. The appeal is allowed with no order as to costs. However, it will be open to the respondent Sebi to initiate proceedings for the relevant period against the relevant entities," a bench led by Justice Tarun Agarwala said.

On 28 March, Sebi imposed a penalty of 2 lakh on ArcelorMittal for the violations. “The enforcement of this order shall be subject to the outcome of the appeals in Monnet Ispat and Energy Ltd, Alok Industries Ltd, and Raj Oil Mills Ltd before Supreme Court," Sebi had said in its order.

Sebi had appealed against an earlier SAT ruling that said the regulator cannot initiate action against a company whose resolution plan has already been approved.

In October 2019, an adjudicating officer of Sebi issued a show-cause notice to ArcelorMittal asking why an inquiry should not be initiated against it and a penalty should not be imposed for non-disclosures related to issuance of non-convertible debentures way back in 2011.

After the completion of the corporate insolvency resolution process Essar was taken over by ArcelorMittal India Pvt Ltd in December 2019. Bankruptcy proceedings were initiated against debt-laden Essar Steel in August 2017.

Citing its earlier order, the tribunal said: “Once a resolution plan has been approved it becomes binding on all creditors, including the government and local authorities."

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