At the heart of the challenge are the provisions that mandate disclosure of agreements which impact the management or control of a listed company, even if the company itself is not a party to the agreement.

The petitions have been brought by five listed Kirloskar Group companies, contending that these disclosure requirements are manifestly arbitrary, disproportionate, and ultra vires the Constitution.

While the non-disclosure of a 2009 Deed of Family Settlement (DFS) entered into among members of the Kirloskar family has long been a point of contention, the 2023 amendments to the LODR Regulations have brought the issue back into focus. These amendments were introduced to enhance transparency and information symmetry.

In December 2024, SEBI issued a letter advising disclosure of DFS under Regulation 30A (introduced by the 2023 amendment), stating that the DFS indirectly created restrictions on the listed entities. This letter was challenged before the Securities Appellate Tribunal (SAT), and the present set of writ petitions followed shortly thereafter.

On June 11, 2025, the Bombay High Court directed SEBI to file its response. The matter will be heard next on August 20, 2025.

LODR Regulations: A Look at the Challenged Provisions

Through these writ petitions, the petitioners have contested the following:

Regulation 30A and Clause 5A of Para A of Part A of Schedule III:

These provisions mandate disclosure of agreements entered into by the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel, employees of the listed entity or of its holding, subsidiary or associate company, among themselves or with the listed entity or with a third party, solely or jointly, which, either directly or indirectly or potentially or whose purpose and effect is to:

• impact the management or control of the listed entity, or
• impose any restriction or create any liability upon the listed entity,

irrespective of whether the listed entity is a party to such agreements. This includes disclosure of any rescission, amendment or alteration to such agreements. Agreements entered in the normal course of business are exempt.

The obligations under said provisions and the timelines for disclosure as per SEBI circulars dated July 13, 2023, and November 11, 2024, are as follows:

Future Agreements:

• Where listed entity is not a party:
  • Parties to the agreements must inform the listed entity within two working days of entering into the agreement or signing an agreement to enter into such agreements.
  • Listed entity must disclose to stock exchanges within 24 hours of the receipt of such information.
• Where listed entity is a party:
  • Disclosure to be made within 12 hours.
  • If the agreement results from a decision taken in a meeting of the board of directors, disclosure is required within 30 minutes of the meeting’s closure.
• Disclosure in annual report: The information under Clause 5A has to be disclosed in the annual report.

Subsisting Agreements:

• Timeline for parties to inform listed entity about the agreement: July 31, 2023.
• Timeline for listed entity to disclose agreements to stock exchanges and on its website: August 14, 2023.
• Disclosure in annual report: The number of such subsisting agreements, their salient features, including the link to the webpage where the details of such agreements are available, have to be disclosed in the annual report for FY 2022-23 or FY 2023-24.

Regulation 30(13):

Also introduced by the 2023 amendments, this provision mandates disclosure of communication from any regulatory, statutory, enforcement or judicial authority, along with the event or information required to be disclosed (in terms of provisions of Regulation 30) pursuant to receipt of such communication, unless prohibited. This provision, too, has been challenged by the petitioners.

Conclusion

When these provisions were sought to be introduced, the proposal had envisaged additional requirements such as the Board of Directors’ opinion on, and shareholder ratification of, such agreements. The removal of these elements reflects an endeavour to strike a balance.

While concerns around SEBI’s regulation include its wide ambit, potential violation of company law and contract law principles—including the doctrine of privity—and the retrospective disclosure of subsisting agreements, SEBI’s position appears to stem from concerns around agreements that may impact the management or control of the listed company.

SEBI’s stance becomes clearer when viewed against the backdrop of recent transactions. For instance, NDTV was not a party to the loan agreement entered into by its promoters, which ultimately facilitated Adani Group’s hostile takeover of NDTV. Similarly, in the Future Group dispute, Future Retail was not a party to the agreement between Amazon and Future Coupons.

It remains to be seen how the Bombay High Court will interpret the impugned provisions in the present case. The Court’s decision is likely to impact the scope and limits of disclosure requirements for listed companies.