SEBI Finds Profit Inflation, Disclosure Gaps At Suzlon; Rs 29 Crore Fine Imposed

Capital markets regulator Securities and Exchange Board of India (SEBI) has imposed penalties of nearly Rs 29 crore on Suzlon Energy after concluding that the company presented a distorted picture of its financial health through a series of transactions involving subsidiaries, profit recognition practices, and disclosure shortcomings. In a detailed 96-page order dated May 29, the regulator found that Suzlon and several former senior executives had breached provisions of the SEBI Act, the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, listing requirements, and disclosure norms.
While the order overturns an earlier adjudication ruling issued in June 2025, it ultimately upholds findings of multiple regulatory violations by the company and its former officials.
Apart from penalising the company, SEBI has levied significant fines on key individuals linked to the alleged violations. Former executive Vinod R. Tanti has been directed to pay Rs 5.75 crore, while Girish R. Tanti faces a penalty of Rs 5.45 crore. Former Group CFO Kirti J. Vagadia has been fined Rs 1.5 crore, and former CFO Amit Agarwal has been ordered to pay Rs 30 lakh.
The investigation stemmed from an anonymous complaint received by the regulator in December 2019. Following the complaint, SEBI initiated a forensic audit and extensive probe covering the period from FY15 to FY20, along with the first three quarters of FY21. The investigation focused on dealings involving subsidiaries, impairment reversals, contingent liabilities, and the accuracy of disclosures made in Suzlon’s financial statements.
Suzlon Energy has later releasing a statement on the matter said, “”The Company will be filing an appeal before the Securities Appellate Tribunal in respect of the SEBI order dated 29th May 2026.”
“There would not be any impact on the financial, operation or other activities of the Company,” it said.
SEBI Flags Transactions That Allegedly Inflated Profits
One of the central issues raised in the order is related to the transfer of Suzlon’s operations and maintenance services business to its subsidiary, Suzlon Global Services Ltd, in March 2014. According to SEBI, the business was valued at approximately Rs 77 crore but was transferred for Rs 2,000 crore, enabling Suzlon to record an accounting gain of Rs 1,922.92 crore.
The regulator said that the subsidiary lacked the financial resources required for such a transaction. It was further observed that a large part of the consideration was subsequently reflected as paid through circular movement of funds between the entities. SEBI concluded that the arrangement generated an artificial profit and significantly boosted the company’s reported net worth. The order noted that Suzlon’s FY14 net worth would have stood at Rs 741 crore without the transaction, compared with the reported figure of Rs 2,664 crore.
The regulator also pointed to a subsequent transaction in which Suzlon transferred its stake in the subsidiary to another wholly owned unit, leading to an additional gain of Rs 829.78 crore. SEBI said this effectively resulted in profits being recognised twice on the same underlying assets.
Another major finding concerns a standby letter of credit associated with borrowings by a foreign subsidiary. SEBI observed that a contingent liability of about $569 million, or roughly Rs 4,050 crore, which had been disclosed in FY17, was omitted from FY18 contingent liability disclosures after being reclassified under an accounting standard linked to insurance contracts.
According to the regulator, this accounting treatment was inappropriate and had the effect of understating the company’s financial exposure. The order further examined transactions involving subsidiaries SE Forge Ltd and Suzlon Gujarat Wind Park, where it found instances of circular fund routing, loan-to-equity conversions, and impairment-related accounting adjustments that allegedly failed to reflect the true economic substance of the transactions.
As a result, SEBI concluded that Suzlon’s financial statements and disclosures did not provide a fair and accurate representation of the company’s financial position. “Financial statements and disclosures of a listed entity constitute the basis on which investors and market participants assess the financial position and prospects of such entity,” Sebi said while explaining the rationale for the penalties.
The regulator added that while it was difficult to precisely determine the extent of gains or investor losses arising from the violations, the matter was serious because investors rely heavily on published financial information when making investment decisions.
The company and other noticees have been directed to deposit the penalties within 45 days of receiving the order.