SEBI has settled adjudication proceedings against Zuari Agro Chemicals Limited (ZACL) and four of its senior executives over alleged misrepresentation of financial statements and regulatory compliance failures, imposing a total settlement amount of ₹2.91 crore along with temporary market restrictions on key officials.
The Securities and Exchange Board of India (SEBI) had initiated proceedings following allegations that ZACL understated losses for FY 2019‑20 and failed to correctly reflect impairment impacts in its financial statements for FY 2018‑19 and FY 2019‑20.
The regulator alleged that the company misrepresented its true financial position through inappropriate accounting treatment, including recording impairment of ₹117.79 crore in comparative figures and transferring certain businesses to a wholly‑owned subsidiary through a slump sale that resulted in an exceptional gain of ₹698.97 crore.
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SEBI also found that the company entered into material related‑party transactions worth ₹811.33 crore with Paradeep Phosphate Limited without obtaining mandatory prior approvals from the audit committee and shareholders, in violation of listing regulations.
The regulator held the company's Managing Director and Chief Financial Officer responsible for publishing misstated financials and failing to discharge their fiduciary duties. Other officials, including a whole‑time director and the company secretary, were found to have failed in ensuring regulatory approvals for related‑party transactions during FY 2020‑21.
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While adjudication proceedings were pending, ZACL and the four officials applied for settlement under SEBI's Settlement Proceedings Regulations, without admitting or denying the findings. The settlement terms were reviewed by SEBI's Internal Committee and recommended by the High Powered Advisory Committee before receiving final approval from SEBI's panel of whole‑time members.
Under the settlement, ZACL paid ₹1.19 crore and accepted a voluntary three‑month debarment from securities market trading. The Managing Director and CFO paid ₹73.12 lakh each and agreed to a four‑month market debarment. The remaining two officials paid ₹12.67 lakh each. SEBI disposed of the proceedings on March 5, 2026, while retaining the right to reopen the case if settlement conditions are breached.
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