Supreme Court sends Vedanta’s Rs 5.25 crore SEBI penalty case back to SAT

The Supreme Court on Wednesday remanded to the Securities Appellate Tribunal a case involving a Rs 5.25 crore penalty imposed by the Securities and Exchange Board of India on Cairn India, now part of Vedanta Ltd, over its 2014 share buyback.

The case relates to Cairn India's Rs 5,725 crore open-market buyback, announced in January 2014 at a maximum price of Rs 335 per share. The company eventually bought back only 21.48% of the maximum number of shares proposed, falling short of the 50% requirement under SEBI's buyback norms.

Following an investigation, SEBI alleged that Cairn India had not placed adequate purchase orders despite sufficient market liquidity and that its buyback announcement had misled investors. The regulator imposed a Rs 5.25 crore penalty on the company in 2021.


Cairn India challenged the order before SAT, arguing that it could not complete the buyback because its shares traded above the maximum buyback price of Rs 335 for much of the offer period.

In October 2023, SAT quashed SEBI's order, holding that the circumstances did not conclusively establish that the company lacked an intention to complete the buyback.

"The company could not have foreseen or predicted that the stock markets would witness this bullish trend at the time when the decision for going for a buyback was taken nor could the company be aware at the time of making the public announcement that the traded price of the scrip would be above the maximum buyback price on 68 days out of 123 trading days," SAT had stated.

SEBI challenged the ruling in the Supreme Court, arguing that Cairn India had not taken substantial steps from the outset to make the buyback successful. It alleged that the announcement was misleading and designed to influence investors' trading decisions.

In 2024, the Supreme Court had refused to stay SAT's order while agreeing to hear SEBI's appeal.

The dispute will now return to SAT for fresh consideration.