ESL Steel Receives Show Cause Notices from RoC Pertaining to Corporate Governance and Compliance
ESL Steel Limited, a subsidiary of Vedanta Iron And Steel Limited (VISL), has received multiple Show Cause Notices (SCNs) from the Registrar of Companies (RoC), Ranchi, concerning matters under the Companies Act, 2013. The notices pertain to various aspects of corporate governance, managerial appointments, and financial reporting across several financial years.The SCNs address issues related to the composition of committees, disclosure requirements for managerial personnel remuneration, and adherence to specific regulatory provisions of the Companies Act, 2013, and related Rules. ESL is currently examining all reported matters and has committed to submitting appropriate responses before the adjudicating authority within the prescribed timelines.
The company stated that these matters will not have a significant financial or operational impact on the business.
Details of Alleged Non-Compliance
The notices issued by the Registrar of Companies cover five key areas, spanning financial years from 2015 to 2021. The table below details each notice, the related section, and the proposed penalties associated with alleged non-compliance.| Sr. No. | Section / Provision | Date of SCN | Financial Period | Brief Particulars of Alleged Non-Compliance | Proposed Penalty on ESL ( ₹ ) | Proposed Penalty on Individuals ( ₹ ) |
|---|---|---|---|---|---|---|
| 1 | Section 203(5) of Companies Act, 2013 | 29-07-2026 | FY 2020-21 | Board resolutions approving appointment of CFO and Company Secretary allegedly did not contain remuneration details in monetary terms. | 5,00,000 | 5,00,000 each on persons named in the notice. |
| 2 | Section 178(8) of Companies Act, 2013 | 21-07-2026 | FY 2020-21 | Alleged non-compliance relating to composition of the Nomination and Remuneration Committee. | 5,00,000 | 1,00,000 each on persons named in the notice. |
| 3 | Section 196 read with Schedule V (Penalty under Section 450) | 21-07-2026 | FY 2019-20 | Alleged failure to annex prescribed Schedule V statement to AGM Notice for approval of remuneration of Whole-time Director. | 2,00,000 | 50,000 each on persons named in the notice. |
| 4 | Section 197(15) read with Rule 5 regarding managerial personnel | 21-07-2026 | FY 2015-16 to FY 2017-18 | Alleged non-disclosure of ratio of directors' remuneration to median employee remuneration and other prescribed disclosures in Board's Report/Corporate Governance Report. | 5,00,000 | 1,00,000 each on persons named in the notice. |
| 5 | Section 197(15) read with Rule 5 regarding managerial personnel | 21-07-2026 | FY 2015-16 to FY 2017-18 | Alleged non-disclosure of ratio of directors' remuneration to median employee remuneration and other prescribed disclosures in Board's Report/Corporate Governance Report. | 5,00,000 | On the persons named in the notice. |
The notices specifically address issues including managerial appointments without detailed remuneration information, composition requirements for the Nomination & Remuneration Committee, and disclosure standards related to director and employee remuneration ratios.
VISL Stock Price Movement
Vedanta Iron and Steel Limited shares today slipped by 0.10% to settle at ₹30.75. The stock, which traded between a low of ₹30.1 and a high of ₹31.63, saw 30.86 million shares changing hands during the session.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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