The Securities and Exchange Board of India (SEBI) has settled adjudication proceedings against Zuari Agro Chemicals Limited (ZACL) and four of its senior executives over alleged financial misrepresentation and regulatory non-compliance, imposing a total settlement amount of ₹2.91 crore along with temporary market restrictions on key officials.

SEBI had initiated proceedings after allegations that ZACL understated its losses for FY 2019‑20 and failed to reflect impairment impacts accurately in its financial statements for FY 2018‑19 and FY 2019‑20. The regulator found that the company misrepresented its financial position through accounting treatments, including recording an impairment of ₹117.79 crore in comparative figures and transferring certain businesses to a wholly-owned subsidiary via a slump sale, which generated an exceptional gain of ₹698.97 crore.

The company was also found to have entered into related-party transactions worth ₹811.33 crore with Paradeep Phosphate Limited without obtaining prior approvals from the audit committee or shareholders, violating listing regulations. SEBI held ZACL’s Managing Director and Chief Financial Officer responsible for publishing misstated financials and failing to discharge fiduciary duties. Other officials, including a whole-time director and company secretary, were found negligent in securing regulatory approvals during FY 2020‑21.

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While adjudication proceedings were ongoing, 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, recommended by the High Powered Advisory Committee, and approved by the 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, while the remaining two officials paid ₹12.67 lakh each. SEBI disposed of the proceedings on March 5, 2026, retaining the right to reopen the case if settlement conditions are violated.

The resolution reflects SEBI’s continued emphasis on corporate accountability and regulatory compliance, aiming to maintain transparency and investor protection in India’s securities market.

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