Regulation 30A Imposes Disclosure Duty, Not Contractual Obligation: SEBI

In response to a recent challenge to certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), SEBI has clarified that Regulation 30A does not seek to bind a listed entity to an agreement to which it is not a party.[1]

The challenge was earlier brought by five listed Kirloskar Group companies through writ petitions filed before the Bombay High Court.

At issue are Regulation 30A and Clause 5A of Para A of Part A of Schedule III of the LODR Regulations, which mandate disclosure of agreements that impact the management or control of the listed entity, or impose any restriction or create any liability upon the listed entity, even if the company itself is not a party to the agreement. The disclosure requirement under Regulation 30(13) has also been contested. These provisions, introduced through the 2023 amendments to the LODR Regulations, aim to enhance transparency and information symmetry. See our blog post for further details on these provisions and the applicable timelines for disclosure.

SEBI’s Submissions

In its affidavit responding to the petitions, the market regulator argued that non-disclosure of material information creates information asymmetry and can lead to significant market reactions when the information eventually becomes public. It stated that shareholders’ right to information outweighs promoters’ claims of privacy over private agreements.

Clarifying misconceptions, SEBI stressed that the provisions do not bind a listed entity to an agreement to which it is not a party, and that entities are free to accompany such disclosures with remarks clarifying their position on enforceability or intention to be bound.

Concluding Thoughts

When the 2023 amendments were introduced, the lack of clarity on the scope of the provisions was a point of contention. Although the additional approval requirements proposed in the consultation paper were ultimately removed, the notified provisions still have a wide scope, compounded by the conscious decision not to define terms such as ‘management,’ ‘restrictions,’ and ‘liability.’ The present case raises further questions, with the petitioners contending that the disclosure requirements are manifestly arbitrary, disproportionate, and ultra vires the Constitution. It remains to be seen how the matter will unfold.

References:

[1] Kirloskar Oil Engines Limited & Anr. v. Securities and Exchange Board of India (Writ Petition No.495 of 2025) and connected matters.