SEBI drops case against National Steel after JSW Steel acquisition

This order disposes of SEBI's adjudication proceedings against National Steel and Agro Industries Limited for alleged manipulation of illiquid stock options on the BSE, as the company ceased to exist as a legal entity after being amalgamated into JSW Steel Coated Products Limited.

Who it concerns: National Steel and Agro Industries Limited (PAN: AAACN3548H)

What SEBI found or ordered

• SEBI alleged the company executed 12 reversal trades in 6 contracts, creating an artificial volume of 580,000 units in the BSE stock options segment between April 1, 2014, and September 30, 2015.
• SEBI alleged violations of Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.
• The company was admitted into Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, on April 11, 2022.
• A resolution plan submitted by JSW Steel Coated Products Ltd was approved by the NCLT on May 19, 2023.
• The NCLT ordered the amalgamation of National Steel and Agro Industries Limited with JSW Steel Coated Products Limited, effective October 4, 2024.
• SEBI concluded that the adjudication proceedings became infructuous because the Noticee ceased to exist as a legal entity.
• The adjudication proceedings are disposed of without imposing a penalty.

Also in the document

• The company was acquired by JSW Steel via its subsidiary JSW Steel Coated Products Limited following the insolvency resolution process.
• The legal basis for disposal is that the entity against which the proceedings were initiated no longer exists due to the court-ordered amalgamation.