SAT directs SEBI to re-examine shareholder complaints on Chrome Silicon warrant issue

The Securities Appellate Tribunal (SAT) on 28 October 2026 directed SEBI to re-examine four complaints by a shareholder, Pratibhuti Vinihit Ltd, and its director against Chrome Silicon Ltd, formerly VBC Ferro Alloys Ltd. The complaints concern the company's 2018 preferential issue of 1,20,00,000 convertible warrants at Rs 45 each. A preferential issue is a sale of shares or warrants to chosen investors rather than to the public.

What Happened

According to the order, the appellants had made eight complaints to SEBI and argued before the tribunal that SEBI had not taken appropriate action. They narrowed their appeal to one prayer against SEBI.

The appellants alleged that three companies shown as promoters in a 2007 draft rights issue document were later shown as non-promoters in the warrant issue, per the order. SEBI had said no action was needed because the rights issue did not go through. The tribunal held it was just and appropriate for SEBI to take a second look.

The appellants also alleged, per the order, that promoters and directors voted on the special resolution at the 2018 annual general meeting against the rules, that related parties were not excluded from voting, and that the company breached SEBI's issue of capital rules on pricing and disclosure. SAT asked SEBI to look again at these three grievances too. It noted a spurt in trading in the company's shares in May 2018, as shown in a chart filed by the appellants.

Three other grievances, including the early conversion of warrants and a proposed merger, were left to the National Company Law Tribunal, which the appellants conceded has jurisdiction. One was not pressed.

What It Means

SAT made no finding against the company; it asked SEBI to examine the matter independently and in accordance with law, keeping in view the NCLT proceedings, which SEBI's counsel said are listed on 31 December 2026. The appellants must keep SEBI informed of developments at the NCLT. SAT's order may be appealed to the Supreme Court. Shareholders with complaints against listed companies can file them at https://scores.sebi.gov.in.

Source: SAT order