Suzlon Energy Penalized ₹28.95 Crore for Financial Misstatements

Case Details

Entity Involved: Suzlon Energy Limited (SEL) and its executives Vinod R. Tanti, Girish R. Tanti, Kirti J. Vagadia, and Amit Agarwal.

Order Number and Date: SEBI Order dated May 29, 2026, issued under Section 15-I(3) of the SEBI Act, 1992 and Section 23-I(3) of the Securities Contracts (Regulation) Act, 1956.

Investigation Period: FY 2014-15 to FY 2019-20 and the first three quarters of FY 2020-21.

Financial Impact: Total penalty of ₹28.95 crore imposed:

Suzlon Energy Limited: ₹15.95 crore
Vinod R. Tanti: ₹5.75 crore
Girish R. Tanti: ₹5.45 crore
Kirti J. Vagadia: ₹1.5 crore
Amit Agarwal: ₹30 lakh

Persons Involved

Company Representatives:

Vinod R. Tanti: Non-Executive Director (FY 2013-14 to 2015-16), Chief Operating Officer (FY 2016-17), Whole-time Director and COO (from FY 2017-18)
Girish R. Tanti: Non-Executive Director (FY 2013-14 to 2015-16), Executive Director (FY 2016-17), Non-Executive Director (thereafter)
Kirti J. Vagadia: Group Chief Finance Officer (FY 2015-16 and FY 2017-18)
Amit Agarwal: Chief Financial Officer (FY 2013-14 until resignation effective August 1, 2015)

Regulatory Authorities:

SEBI Whole Time Member Sandip Pradhan issued the final order
Adjudicating Officer had previously exonerated the noticees in order dated June 27, 2025

Violations and Allegations

Operation & Maintenance Business (OMS) Transfer:

SEL transferred OMS business with net book value of ₹77.08 crore to wholly-owned subsidiary SGSL for ₹2,000 crore on March 29, 2014
Recognized profit of ₹1,922.92 crore in FY 2013-14
Only ₹700 crore received from FY 2014-15 to 2016-17; balance ₹1,300 crore discharged through circular routing of funds in March 2017
Net worth shown as ₹2,663.96 crore instead of ₹741.04 crore without the transaction
In FY 2015-16, SEL sold entire equity stake in SGSL to another wholly-owned subsidiary SSL for ₹927.83 crore, recognizing additional profit of ₹829.78 crore
Without this profit, SEL's net worth for FY 2015-16 would have been negative ₹214.60 crore instead of positive ₹615.18 crore

SBLC Liability Misclassification:

SBLC issued by SBI securing loan facility for AE Rotor Holding B.V. (AERH) with contingent liability of USD 569.40 million (approx. ₹4,050 crore)
Shown as contingent liability in FY 2016-17 but reclassified as insurance contract under Ind AS 104 in FY 2017-18
SBLC was invoked in October 2019, with SBI making payment to lenders and treating it as loan receivable from SEL
Proper accounting should have been under Ind AS 109 for financial guarantees

SEFL Transactions:

Investment of ₹566 crore impaired in FY 2013-14, reversed in FY 2014-15, and impaired again in FY 2018-19 (₹560 crore) and FY 2019-20 (₹194.27 crore)
Equity infusion of ₹150 crore in FY 2014-15 with immediate return of ₹128 crore as loan repayment
Capital infusion of ₹328 crore in FY 2015-16 followed by immediate repayment and conversion into equity through circular entries

SGWPL Transactions:

Equity infusion of ₹1,200 crore into SGWPL through sixteen circular entries of ₹75 crore each on March 19, 2016
Funds immediately returned and adjusted against outstanding loans, converting loans into equity
Investments sold to SPIL for ₹191.60 crore at loss of ₹1,054 crore on March 29, 2016
No net cash inflows or outflows in these transactions

Regulatory Violations:

Section 12A(a), (b), (c) of SEBI Act
Regulations 3(b), (c), (d) and 4(2)(f), (r) of PFUTP Regulations
Regulations 4(1)(a), (b), (e), 17(8) read with Part B of Schedule II, and 48 of LODR Regulations
Clause 41(I)(a) and Para V of Clause 49 of erstwhile Listing Agreement read with Section 21 of SCRA

Penalties, Settlement Terms & Rulings

Monetary Penalties Imposed:

Legal Basis for Penalties:

Section 15HA of SEBI Act for fraudulent and unfair trade practices (min ₹5 lakh, max ₹25 crore or 3x profits)
Section 15HB of SEBI Act for contravention where no separate penalty provided (min ₹1 lakh, max ₹1 crore)
Section 23H of SCRA for contravention where no separate penalty provided (min ₹1 lakh, max ₹1 crore)

Revision Proceedings:

Original adjudication order dated June 27, 2025 exonerated all noticees
SEBI invoked revision powers under Section 15-I(3) of SEBI Act and Section 23-I(3) of SCRA
Revision SCN issued on September 26, 2025
Final order sets aside AO's order and imposes penalties

Actions, Compliance, and Future Obligations

Corrective Actions:

Noticees required to pay penalties within 45 days of order receipt
Payment can be made via demand draft or online through SEBI portal
Failure to pay may lead to recovery proceedings under Section 28A of SEBI Act

Disclosure Requirements:

Noticees must provide payment details including PAN, case name, purpose, bank details, and transaction number
Payment confirmation to be sent to Division Chief (Enforcement Department 1) and tad@sebi.gov.in

Final Ruling and Enforcement

Key Findings:

OMS transaction chain lacked genuine economic purpose and created misleading financial presentation
SBLC/AERH exposure should have been accounted under Ind AS 109, not Ind AS 104
SEFL and SGWPL transactions involved circular fund movements without economic substance
Financial statements from FY 2013-14 to 2017-18 presented misleading picture of profitability and net worth

Legal Principles Applied:

PFUTP Regulations have broad interpretation covering misleading financial statements
Mens rea not required to be proved separately for civil proceedings
Revision powers under Section 15-I(3) can be invoked even when AO exonerates noticees
Formal approvals and disclosures do not justify misleading financial presentation

Enforcement Actions:

Order effective immediately from May 29, 2026
Copy of order sent to all noticees as per Rule 6 of SEBI Inquiry Rules
SEBI may initiate recovery proceedings for non-payment within stipulated period