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Informist, Wednesday, Sept. 9, 2026

 

--SC sends back case to SAT on SEBI's INR-52.5-mln penalty against Vedanta 

--CONTEXT: SAT had rejected SEBI's fine against Vedanta in buyback case

 

NEW DELHI – The Supreme Court Wednesday remanded back the case to Securities Appellate Tribunal on the Securities and Exchange Board of India's INR-52.5-million penalty against Cairn India Ltd., now merged with Vedanta Ltd., in a buyback case. "We have remanded the matter to tribunal. The inquiry was very tardy. We have sent it back for that limited purpose," said a Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran. The apex court was hearing the market regulator's appeal against the appellate tribunal's Oct. 5, 2023, order to reject SEBI's penalty against Vedanta Ltd. 

 

The case has its genesis from Cairn India board approving a share buyback of INR 57.25 billion from the open market route, scheduled to be done between January 2014 and July 2014. However, the open market buyback did not succeed as the company bought back only 21.48% of the maximum number of buyback shares and fell short of the 50% minimum requirement under the buyback norms.

 

After investigating the matter, SEBI found that the company's orders to buy back shares on the National Stock Exchange and BSE were not adequate despite favourable liquidity. The market regulator held that the company had misled investors with regard to its announced buyback of shares. Consequently, in 2021, the market regulator passed a penalty order against the company. Challenging this, Vedanta moved the appellate tribunal. 

 

Vedanta argued in the appeal that the sole reason for non-completion of the buyback was that the shares moved above the maximum buyback price of INR 335 for 65 out of 123 trading days available during the buyback period. The appellate tribunal held that the facts did not conclusively prove that the company had shown no intent to successfully complete the buyback and set aside the market regulator's order.

 

In its appeal before the apex court, the market regulator said that the appellate tribunal failed to appreciate that the company from the initial stages of the buyback offer had not taken any substantial steps to make the same successful. The announcement of the buyback by Cairn India was misleading and designed to influence the decision of the investors and induce them to trade in the shares of the company, which was reflected in the increased trading volume after the announcement, said the market regulator.

 

At 1332 IST, shares of Vedanta Ltd. were up 1.2% at INR 275.15 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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