Mumbai: Markets regulator Securities and Exchange Board of India (Sebi) has settled adjudication proceedings against several executives and independent directors of One97 Communications Ltd, the parent of fintech firm Paytm, for alleged violations of securities laws.
The case initiated in 2023 concerns breaches of Sebi’s Listing Obligations and Disclosure Requirements Regulations (LODR Regulations) and Issue of Capital and Disclosure Requirements Regulations (ICDR Regulations).
The adjudication proceedings stemmed from concerns raised by Sebi in July 2023 regarding the actions of Amit Khera, Paytm’s then-compliance officer and company secretary, as well as other independent and non-executive directors of the company. These included allegations of non-compliance with regulations regarding the listing of securities and improper disclosure during the company’s IPO process.
According to the show cause notice issued in May 2024, Sebi found that Amit Khera failed to comply with Sebi’s LODR regulations. Independent directors Ashit Ranjit Lilani and Neeraj Arora were also accused of impartially approving offers involving benefits to Paytm’s MD & CEO Vijay Shekhar Sharma, and his relatives.
Other directors – Douglas Feagin, Munish Varma, Ravi Chandra Adusumalli, Mark Schwartz, and Pallavi Shardul Shroff – were also implicated for signing offer documents containing incorrect and incomplete disclosures, including statements about Paytm being a professionally managed company with no identifiable promoter, despite Sharma being identified as the company’s promoter.
In response to these allegations, the officials sought to resolve the matter through settlement applications, proposing monetary settlements without admitting or denying the violations.
Sebi’s internal committee (IC) reviewed the settlement proposals and recommended the settlement amounts based on factors outlined in its Settlement Proceedings Regulations, 2018.
The proposed settlement amounts were as follows:
- Ashit Ranjit Lilani and Neeraj Arora agreed to pay ₹53.62 lakhs each.
- Ravi Chandra Adusumalli, Mark Schwartz, Pallavi Shardul Shroff, Douglas Feagin, and Munish Varma agreed to pay ₹42.90 lakhs each.
- Amit Khera agreed to pay ₹11.05 lakhs.
The settlement was finalised after approvals by the high powered advisory committee (HPAC) in September 2024 and by Sebi’s panel of whole time members (WTMs) in December 2024. The applicants were required to remit the settlement amounts by December 2024, which was confirmed by Sebi. As a result of the settlement, the adjudication proceedings have been officially closed.
However, Sebi retains the right to revisit the matter if any discrepancies or violations of the settlement terms arise. The settlement is also conditional on full and truthful disclosure by the applicants and compliance with the undertakings made during the settlement process.
