SK Finance Ltd has settled enforcement proceedings with the market regulator, the Securities and Exchange Board of India, by paying a settlement amount of ₹8.75 lakh for issues related to the issuance and subsequent down-selling of non-convertible debentures (NCDs) that were deemed to constitute a public issue under securities laws.
The settlement stems from a suo-motu application filed by SK Finance under the SEBI (Settlement Proceedings) Regulations, 2018, seeking to resolve potential violations without admitting or denying the findings of fact or conclusions of law. The alleged violations pertained to provisions of the Companies Act, 2013 and the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
According to SEBI, SK Finance had allotted 50 lakh NCDs to Karvy Capital Ltd on 21 December 2018. A day before the listing of these NCDs on 31 December 2018, Karvy down-sold the debentures to 500 investors. Since this down-selling to more than 200 investors occurred within six months of issuance, the transaction was deemed a public issue, triggering regulatory noncompliance.
Subsequently, the company refunded the amounts to all NCD holders on 12 March 2024, and the international securities identification number (ISIN) associated with the debentures was extinguished. As part of the settlement process, SEBI’s internal committee (IC) discussed the matter with the company’s authorised representatives in meetings held in July and September 2025.
SK Finance later submitted revised settlement terms in October 2025, proposing a settlement amount of ₹8.75 lakh. The high-powered advisory committee (HPAC) considered and recommended the proposal in November 2025, which was approved by the SEBI panel of whole-time members (WTM) in January 2026. Following this, a notice of demand was issued and the company confirmed remittance of the settlement amount, which SEBI acknowledged as received.
With the passing of the settlement order, SEBI will not initiate enforcement action against SK Finance for the specified violations. However, the order remains without prejudice to SEBI’s rights to reopen proceedings if any representations are later found to be untrue, if settlement conditions are breached, or if discrepancies in the settlement amount emerge.
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