Paytm's Ex-Board Members Settle With SEBI For Rs. 3.3 Crore Over Non-Disclosure Of Material Information
SEBI had charged Paytm's ex-directors for failing to disclose material information during the IPO, including incomplete details on the company’s management and conflicts of interest.
The Securities and Exchange Board of India on Friday allowed eight previous board members of Paytm operator One97 Communications to settle for non-disclosure of material information. The total quantum of settlement stood at Rs. 3.3 crore.
The two previous independent directors at Paytm, Ashit Ranjit Lilani, and Neeraj Arora settled with SEBI by paying Rs.53.63 lakh each.
Meanwhile, Ravi Chandra Adusumalli, Mark Schwartz, Pallavi Shardul Shroff, Douglas Feagin, and Munish Varma, all former directors (either Non-Executive Nominee or Independent), each settled for Rs.42.90 lakh.
Furthermore, Amit Khera, the former Compliance Officer and Company Secretary, resolved the proceedings by paying Rs.11.05 lakh.
The regulator has approved the quantum of settlement via its High Power Advisory Committee.
The regulator had made grievous allegations against Paytm previously, with ex-directors of the company were said to not have fulfilled their regulatory obligations during the IPO process.
Independent directors, Lilani and Arora, allegedly failed to maintain an unbiased approach in decision-making, especially concerning benefits of Vijay Shekhar Sharma (MD & CEO, One97 Communications) and his relatives.
All directors authorised and signed IPO offer documents containing incomplete disclosures, particularly regarding Paytm being described as a "professionally managed" company despite having an identifiable promoter in Sharma.
The compliance officer allegedly failed to ensure regulatory conformity for the listed entity.
The settlement has been reached under the consent mechanism scheme of the regulator that allows parties to settle without accepting or denying the allegations. However, in case the regulator finds any issues in the agreed terms of the settlement, it can reopen its investigation.
