February 21, 2026 : The Securities Appellate Tribunal has upheld a ₹5 lakh penalty imposed on Som Distilleries & Breweries Ltd. for failing to make clear and accurate disclosures regarding the cancellation of a proposed ₹100 crore preferential fund raise.
In its order dated February 20, 2026, the Tribunal dismissed the company’s appeal against an adjudication order passed by the Securities and Exchange Board of India on November 30, 2023. The penalty had been imposed for violation of the SEBI Act, 1992 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Bench comprising Justice P.S. Dinesh Kumar, Presiding Officer, and Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar found that the company’s disclosures were inadequate and potentially misleading.
The case arose from a SCORES complaint, following which SEBI examined possible violations of disclosure norms during the period between December 9, 2022 and February 2, 2023.
On December 9, 2022, the company informed stock exchanges that its Board had approved an expansion plan of approximately ₹100 crore for setting up new facilities at Bhopal and Hasan. It also approved raising capital through the issuance of up to 65,000 convertible equity warrants to promoters on a preferential basis at ₹142 per warrant.
A subsequent announcement dated December 15, 2022 stated that an Extraordinary General Meeting would be held on January 7, 2023 to consider and approve the issuance of these warrants.
However, on January 2, 2023, the company announced that the EGM had been cancelled due to “unforeseen and unavoidable circumstances” Later, on January 27, 2023, an audio recording was uploaded in which the Finance Director stated that the preferential issue had been deferred because of a lesser requirement of funds towards capital expenditure.
The Tribunal noted that a corporate announcement regarding expansion and fund raising is likely to influence a company’s share price. Once an expansion plan of this scale is announced, there is a real possibility of movement in the stock price.
It held that merely stating that the EGM was cancelled did not clearly communicate that the proposal to issue convertible equity warrants had effectively been dropped. The Bench observed that the January 2 announcement did not convey a “clear message” that the fund-raising plan had been abandoned.
The Tribunal also pointed out the inconsistency between the reason cited on January 2 and the explanation later given on January 27. While the cancellation was initially attributed to unforeseen circumstances, the later disclosure indicated that the issue was deferred due to reduced funding needs.
Referring to Regulation 4 and Regulation 30 of the LODR Regulations, the Bench reiterated that listed entities must ensure disclosures are adequate, accurate, explicit, timely and not misleading. In this case, the company had created an impression that it was proceeding with a ₹100 crore expansion while failing to clearly disclose that the fund-raising proposal had been shelved.
The Tribunal agreed with SEBI’s finding that it was difficult to quantify any disproportionate gains but held that the violation of disclosure obligations was established. It found no reason to interfere with the adjudicating officer’s order and dismissed the appeal.
Case Details
Case Title: Som Distilleries & Breweries Ltd v. Securities and Exchange Board of India
Case Number: Appeal No. 90 of 2024
Coram: Justice P.S. Dinesh Kumar, Presiding Officer; Meera Swarup, Technical Member; Dr. Dheeraj Bhatnagar, Technical Member.
Counsels : Mr. Kunal Mehta, Advocate, appeared for the Appellant; Mr. Vishal Kanade, Advocate, along with Ms. Nidhi Singh, Ms. Komal Shah and Mr. Nishin Shrikhande, Advocates instructed by Vidhii Partners, appeared for the Respondent.
