SEBI orders ₹1,922.92 crore artificial profit probe in Suzlon Energy case

This order addresses allegations that Suzlon Energy Limited and its officials misstated financial statements through a 'slump sale' of its OMS business to a subsidiary and by improperly accounting for contingent liabilities, thereby inflating net worth and misleading investors.

Who it concerns: Suzlon Energy Limited, Vinod R. Tanti, Girish R. Tanti, Kirti J. Vagadia, and Amit Agarwal

What SEBI found or ordered

• SEBI alleged that the sale of the OMS business to subsidiary SGSL for Rs. 2,000 crore (against a value of Rs. 77.08 crore) created an artificial profit of Rs. 1,922.92 crore in FY 2013-14.
• SEBI alleged that a subsequent transfer of SGSL stakes to another subsidiary created an additional artificial profit of Rs. 829.78 crore in FY 2015-16.
• SEBI alleged that without these transactions, Suzlon's net worth would have been negative in FY 2015-16 and FY 2014-15.
• SEBI alleged that Suzlon failed to disclose a contingent liability of USD 569.40 million (approx. Rs. 4,050 crore) related to a Stand-by Letter of Credit (SBLC) in its FY 2017-18 annual report.
• SEBI appointed a forensic auditor (Sarath & Associates) and investigated the period from FY 2014-15 to the first three quarters of FY 2020-21.
• The order is based on findings from an Adjudicating Officer (AO) who issued a Show Cause Notice (SCN) in November 2022, with a corrigendum in March 2025.

Also in the document

• The alleged financial misstatements involved amounts in the thousands of crores (e.g., Rs. 1,922.92 crore and Rs. 829.78 crore in artificial profits).
• The investigation covered a period of approximately six years (FY 2014-15 to Q3 FY 2020-21).
• The order mentions cross-border entities, specifically AE Rotor Holding B.V. (AERH), a wholly-owned subsidiary involved in the SBLC issue.