Zuari Agro settles with SEBI after paying ₹1.2 crore; Company officials face trading ban

The Securities and Exchange Board of India (SEBI) on March 5, 2026 approved a settlement resolving adjudication proceedings against Zuari Agro Chemicals Limited (ZACL) and four executives, Sunil Sethy (MD), R K Gupta (CFO), Nitin Manguesh Kantak (WTD), and Vijayamahantesh Khannur (CS), without admission or denial of guilt.

Under the settlement terms, ZACL will pay around ₹1.2 crore and voluntarily debar itself from buying, selling or trading in the securities market for three months. Sethy and Gupta will each pay ₹73.12 lakh and face voluntary debarment from the securities market for four months, while Kantak and Khannur will pay ₹12.67 lakh each with no debarment.

The proceedings related to alleged violations spanning FY20 and FY21, including under-reporting of losses and misrepresentation of ZACL’s FY20 financial statements. SEBI said the company had inappropriately recorded an impairment of ₹117.79 crore in FY19 comparatives and transferred certain businesses to its wholly-owned subsidiary through a slump sale that resulted in an exceptional gain of ₹698.97 crore, thereby concealing its actual financial position.

The regulator also alleged that ZACL entered into material related-party transactions worth ₹811.33 crore with Paradeep Phosphate Limited without obtaining prior approval from the Audit Committee and shareholders.

SEBI had appointed an adjudicating officer on December 4, 2024 to examine the matter, following which a show cause notice was issued on January 14, 2025, alleging violations of SEBI (LODR) Regulations, 2015, Sections 12A and 27 of the SEBI Act, PFUTP Regulations, 2003, and Ind-AS 8.

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The settlement applications were filed on March 7, 2025. SEBI’s internal panel met on June 26 and September 17, 2025, while the High Powered Advisory Committee considered the case on July 24 and November 28, 2025.

The panel of whole-time members approved the settlement on February 2, 2026, and the decision was communicated to the applicants on February 4, 2026. The applicants confirmed payment of the settlement amounts on February 24, 2026, after which SEBI disposed of the adjudication proceedings under Section 15JB of the SEBI Act.

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The regulator said the settlement order is without prejudice to its right to initiate or restore enforcement action if the applicants fail to comply with the settlement terms.

Shares of Zuari Agro Chemicals ended 0.6% lower at ₹210.9 on the NSE today, March 5.