The management of One97 Communications, the parent firm of Paytm, has paid penalties to Sebi to clear allegations of noncompliance. The material misrepresentations mostly stem from the issuance of special benefits to Vijay Shekhar Sharma, the founder of Paytm, and his relatives, as well as the certification and endorsement of public offering documents that contained false statements and insufficient disclosures regarding the promoting party.
Sebi had passed the order for the settlement on January 17 of the year. The settlement amount was recommended by SEBI’s advisory committee, and then endorsed by the whole-time members committee.
Former compliance officer Amit Khera, along with a number of former members of the board, including independent directors Ashit Ranjit Lilani, Neeraj Arora, Mark Schwartz, Pallavi Shardul Shroff; directors Douglas Feagin, Munish Varm, and Ravi Chandra Adusumalli all had to settle the alleged violations against Listing Regulations and Public Issue Regulations of the market regulator by paying a total of Rs 3.
The regulator finds that Khera had failed to adhere to the necessary regulatory requirements relating to the company and compliance of the listed entity in terms of the LODR Regulations, 2015.
Further, independent directors Lilani and Arora, who are members of the NRC, failed to act in an impartial and independent manner while exercising the decisions that favored MD & CEO Vijay Shekhar Sharma and his relatives as per the order.
In May 2024, the market regulator released a show-cause notice alleging that the NRC has failed to perform their responsibilities objectively and independently. Additionally, the former board members were accused of certifying and signing offer documents that contained false statements and insufficient disclosures.
The offer documents were signed by the directors even though they had representations that were misleading and certain disclosures that were not complete, as noted.
They were then submitted to the Internal Committee of Sebi during its sitting held on 27.08.2008.
Settlement Details
On January 17, 2025, SEBI issued a settlement order where it detailed the amounts paid by each individual:
- Amit Khera: ₹11.05 lakh
- Ashit Ranjit Lilani: ₹53.62 lakh
- Neeraj Arora: ₹53.62 lakh
- Douglas Feagin: ₹42.90 lakh
- Munish Varma: ₹42.90 lakh
- Ravi Chandra Adusumalli: ₹42.90 lakh
- Mark Schwartz: ₹42.90 lakh
- Pallavi Shardul Shroff: ₹42.90 lakh
The total payment of ₹3.32 crore is intended to resolve the regulatory issues without further legal proceedings.