Market regulator SEBI on Friday expressed deep regret over its delay in unfreezing the shares held by certain members of the Kirloskar family in the Kirloskar Industries Ltd (KIL) despite SAT’s order.

“I think what happened in terms of delay in de-freezing accounts was unacceptable. Whatever have been the cause and root cause, communications with the depository etc., SEBI was responsible, SEBI was accountable, we deeply regret what happened,” Madhabi Puri Buch, Chairperson, SEBI, said on the sidelines of Global Economic Policy Forum 2023, organised by DEA-CII here.

Buch also said the regulator has already initiated full process review and the relevant corrective measures to revamp the process will be undertaken in next 30-45 days. “So that risk of this happening again is completely minimised,” she added.

Securities Appellate Tribunal (SAT) had on Monday pulled up SEBI for its ‘lackadaisical’ approach in Kirloskar matter and failing to unfreeze the shares held by members of the Kirloskar family in Kirloskar Industries despite the Tribunal’s directive. 

Also, it asked SEBI to deposit costs of ₹5 lakh before the Tribunal’s Registry.

The background

SEBI had, in October 2020, restrained Atul Kirloskar, Rahul Kirloskar, Alpana Kirloskar, Arti Kirloskar, and Jyotsna Kulkarni from accessing the securities market for six months, for not disclosing price-sensitive information on KIL on time.

The market regulator’s order was challenged in SAT, which in December 24, 2020 passed an interim order and stayed Sebi’s order partially —subject to an undertaking to the effect that the appellants would not sell their shares in KIL.

In October last year, SAT passed a final order and set aside SEBI’s order of October 2020. Despite this, the appellants’ shares in KIL remained frozen, SAT had noted.  In its order, SAT noted that a blame game started between SEBI and NSDL. 

“Both entities are blaming each other for non-compliance of the SAT order. The net result is that there is apathy on the part of SEBI in not taking follow-up action,” SAT had noted.