sebi
Published on 15 July 2025
One97 Communications Executives Settle Regulatory Violations with Sebi
SEBI Fines Former Paytm Directors Over Governance and Disclosure Lapses
Mumbai | January 2025 – In a high-profile regulatory development, the Securities and Exchange Board of India (SEBI) has concluded settlement proceedings against several former board members and senior officials of One97 Communications Ltd., the parent company of Paytm, for lapses related to IPO disclosures and governance decisions. The settlements, totaling over ₹3.32 crore, pertain to alleged misstatements in public offer documents and the grant of unauthorized benefits to Managing Director and CEO Vijay Shekhar Sharma and his family members.
Who Paid What: Settlement Summary
The following individuals agreed to settle the regulatory proceedings by paying penalties as outlined below:
| Name | Role | Settlement Amount (₹) |
|---|---|---|
| Amit Khera | Former Compliance Officer | ₹11.05 lakh |
| Ashit Ranjit Lilani | Former Independent Director | ₹53.62 lakh |
| Neeraj Arora | Former Independent Director | ₹53.62 lakh |
| Mark Schwartz | Former Independent Director | ₹42.90 lakh |
| Pallavi S. Shroff | Former Independent Director | ₹42.90 lakh |
| Douglas Feagin | Former Director | ₹42.90 lakh |
| Munish Varma | Former Director | ₹42.90 lakh |
| Ravi C. Adusumalli | Former Director | ₹42.90 lakh |
All payments were made under SEBI’s settlement mechanism, without admission or denial of wrongdoing, as permitted under the SEBI (Settlement Proceedings) Regulations.
SEBI’s Findings: Key Allegations
1. Amit Khera – Former Compliance Officer
- Charge: Failed to ensure regulatory compliance for a listed entity.
- Provision Violated: Regulation 6(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
2. Ashit Ranjit Lilani & Neeraj Arora – Former Independent Directors
Allegation 1: As members of the Nomination and Remuneration Committee (NRC), they allegedly approved benefits for the CEO and his relatives without adequate objectivity or scrutiny.
- Provision Violated: Regulation 4(2) of SEBI (LODR) Regulations, 2015.
Allegation 2: Signed off on IPO offer documents that lacked full disclosure and contained inaccurate statements regarding the promoter status of the company.
- Provision Violated: Regulation 245(1) and (2) of SEBI (ICDR) Regulations, 2018.
3. Remaining Former Directors – Feagin, Varma, Adusumalli, Schwartz, Shroff
- Charge: Approved a public offer document that described One97 Communications as a “professionally managed company with no identifiable promoter,” despite Vijay Shekhar Sharma’s significant influence and control.
- Provision Violated: Regulation 245(1) and (2) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Timeline of Proceedings
- Show-Cause Notices: Issued by SEBI on May 17, 2024.
- Settlement Orders: Finalized and disclosed on January 17, 2025.
- Outcome: Regulatory proceedings concluded after payment of the specified settlement amounts.
Key Lessons for India Inc.
1. Disclosure Accuracy Is Non-Negotiable
IPO documents must reflect the true promoter structure, governance realities, and business relationships. Misrepresenting such fundamentals, even indirectly, undermines investor confidence and violates SEBI norms.
2. Directors Share Equal Responsibility
Both executive and independent directors are bound by fiduciary duties. The claim of being “non-executive” or “independent” does not exempt board members from accountability for flawed disclosures or unvetted decisions.
3. Compliance Must Be Active, Not Passive
Compliance officers and NRC members are expected to question, verify, and document decisions—especially when they involve compensation to promoters or claims made in IPO filings.
4. SEBI Is Watching
Even in the absence of direct investor harm, SEBI’s actions demonstrate that regulatory standards are to be upheld proactively, not only in the event of misconduct or fraud.
Conclusion
The penalties imposed on former Paytm board members and executives serve as a powerful reminder that corporate governance is a shared responsibility—and one that does not end with the filing of a prospectus. As India’s capital markets mature and attract global attention, the burden on directors and senior officers to act transparently, diligently, and independently continues to rise.