SC dismisses SEBI’s appeal against overturn of the penalty imposed on Tata Steel The SC recently dismissed the Securities and Exchange Board of India’s appeal against an appellate tribunal order.
It overturned a ₹2-lakh penalty imposed on Tata Steel over disclosure lapses by Bhushan Steel that the company had acquired. Debt-laden Bhushan Steel was taken over by Tata Steel through the insolvency process in 2018 and renamed Tata Steel BSL.
Justice Sanjiv Khanna said while upholding the tribunal’s order that the penalty amount was too small for the market regulator to challenge it before the Supreme court. But it left the question of law open on whether penalty could be levied on the new management.
Therefore, the issue has been raised in various other appeals and is pending before the SC.
SAT (Securities Appellate Tribunal), while quashing the penalty order in February last year, had held Bhushan Steel that had gone into insolvency in July 2017 and, under the IBC, no penalty could be levied on the new management which came into the picture on May 18, 2018.
