Zuari Agro Chemicals Ltd. has settled a case with the Securities and Exchange Board of India in connection with alleged misrepresentation in its financial statements and lapses in approvals for related party transactions.
The settlement brings an end to the adjudication proceedings initiated by the regulator, after the company and four former senior executives paid the agreed settlement amounts and accepted temporary restrictions from the securities market.
SEBI said Zuari Agro Chemicals paid ₹1.2 crore as settlement amount to resolve the matter. As part of the settlement terms, the company also agreed to a voluntary debarment from buying, selling, or dealing in the securities market for three months.
Alongside the company, four individuals who held senior positions during the period of the alleged violations also settled the matter. Together, they paid ₹1.7 crore to SEBI. The regulator noted that, after receiving the settlement amounts, the adjudication proceedings initiated through the show cause notice dated January 14, 2025, stood disposed of under the Settlement Regulations.
It is important to note that the settlement was reached without admission or denial of the facts and legal conclusions recorded in the proceedings.
Among the individuals, Sunil Sethy, who was the managing director at the time, and R K Gupta, who served as chief financial officer, paid ₹73.12 lakh each. Both also agreed to a voluntary debarment from the securities market for 4 months.
Nitin Manguesh Kantak, who was whole time director, and Vijayamahantesh Khannur, who served as company secretary, each paid ₹12.67 lakh as part of the settlement.
SEBI’s order linked these officials to the period during which the alleged violations took place and said they were responsible for failing to discharge their duties properly in matters relating to disclosures and approvals.
The case stemmed from SEBI’s show cause notice, in which the regulator alleged that Zuari Agro Chemicals had misrepresented its financial statements for the financial year 2019 to 20. According to the allegations, the company under reported losses and recorded impairment of investments incorrectly.
SEBI also alleged that the company transferred certain businesses to its wholly owned subsidiary through a slump sale. This transaction, according to the regulator, resulted in an exceptional gain that was allegedly used to conceal the company’s actual financial position.
Another major allegation related to material related party transactions worth ₹811.33 crore with Paradeep Phosphate Ltd. SEBI said these transactions were entered into without obtaining prior approval from the audit committee and shareholders, which raised concerns over compliance and corporate governance processes.
While the adjudication proceedings were still pending, the applicants filed a settlement application with SEBI on March 7, 2025. They sought to resolve the case through a settlement order without contesting the matter through the full course of enforcement proceedings.
The application was then reviewed through SEBI’s internal process. Following discussions with the internal committee and consideration by the High Powered Advisory Committee, the proposed terms were recommended for approval. These terms were later cleared by the panel of SEBI whole time members on February 2, 2026.
After the applicants paid the settlement amounts in line with the approved terms, SEBI passed the settlement order and disposed of the proceedings.\
As of March 5, 2026, at 3:30 PM, Zuari Agro Chemicals share price closed at about ₹210.37 on the NSE.
The settlement in the Zuari Agro Chemicals matter closes SEBI’s adjudication proceedings relating to alleged financial statement misrepresentation and related party transaction lapses.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Mar 6, 2026, 9:54 AM IST
Team Angel One
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