sebi
Published on 15 July 2025
One97 Communications Executives Settle SEBI Fines for Regulatory Violations
SEBI Penalises Former One97 Communications Executives Over Disclosure Lapses and Governance Failures
Mumbai | July 2025 — In a high-profile regulatory development, the Securities and Exchange Board of India (SEBI) has settled proceedings against several past directors and senior executives of One97 Communications Ltd., the parent company of Paytm, for violations related to disclosure lapses, corporate governance irregularities, and undisclosed benefits granted to the company’s Managing Director and CEO, Vijay Shekhar Sharma, and his relatives.
The individuals involved collectively paid over ₹3.32 crore in penalties as part of a SEBI settlement order dated January 17, 2025, resolving the matter without admission or denial of wrongdoing.
Who Paid What: Settlement Details
| Name | Designation | 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 | 42.9 lakh |
| Pallavi Shardul Shroff | Former Independent Director | 42.9 lakh |
| Douglas Feagin | Former Director | 42.9 lakh |
| Munish Varma | Former Director | 42.9 lakh |
| Ravi Chandra Adusumalli | Former Director | 42.9 lakh |
These penalties were paid to settle show-cause notices issued by SEBI in May 2024, following its investigation into the company’s public disclosures and internal governance practices during its public offer.
Summary of SEBI's Allegations
1. Amit Khera – Former Compliance Officer
- Allegation: Failed to ensure compliance with mandatory disclosure and governance norms applicable to a listed entity.
- Violation: Regulation 6(2) of SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.
2. Ashit Ranjit Lilani & Neeraj Arora – Former Independent Directors
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Conflict of Interest: As members of the Nomination and Remuneration Committee (NRC), they failed to maintain objectivity when approving benefits to Vijay Shekhar Sharma and his relatives.
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Misleading Offer Documents: They also approved and signed IPO documents that SEBI found to contain inaccurate and incomplete disclosures regarding the company’s promoter entity.
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Violations:
- Regulation 4(2) of LODR Regulations, 2015 (regarding fair governance).
- Regulation 245(1) and 245(2) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
3. Other Former Directors: Feagin, Varma, Adusumalli, Schwartz, Shroff
- Allegation: These directors signed off on the company’s IPO documents, which incorrectly stated that One97 was a professionally managed entity without an identifiable promoter—a claim found to be inconsistent with reality, given Sharma’s role and control.
- Violation: Regulation 245(1) and (2) of SEBI’s ICDR Regulations, 2018.
Nature of the Settlement
- The settlement order was issued without admission or denial of guilt.
- Upon payment of the specified amounts, SEBI disposed of the proceedings, opting not to pursue further enforcement.
What This Means for Corporate Governance
This case reaffirms several core regulatory expectations:
Disclosure Accuracy is Paramount
Public offer documents must reflect the true promoter identity, governance structure, and related-party relationships. Misstatements—intentional or negligent—can invite serious scrutiny.
Directors Are Accountable—Independent or Not
Both independent and executive directors are fiduciaries to public shareholders. SEBI expects them to exercise independent judgment, especially on matters involving promoter benefits or board-level disclosures.
Compliance Officer’s Role Is Not Ceremonial
A compliance officer is expected to actively ensure regulatory adherence. Failure to flag or correct lapses may trigger personal liability—even in the absence of direct intent.
Investor Implications
For retail and institutional investors alike, this regulatory action is a reminder to:
- Examine IPO documents and governance structures closely, particularly promoter designations and related-party transactions.
- View "professionally managed" claims with caution, especially in companies with dominant founder-CEOs.
- Recognise that board accountability is not merely formal—SEBI now holds directors individually responsible for misstatements.
Conclusion
SEBI’s settlement with the former directors and executives of One97 Communications underscores its zero-tolerance approach to governance and disclosure failures, regardless of a company’s market stature. It also reflects a maturing capital market regulatory environment where transparency, accuracy, and board independence are no longer optional—they are enforceable obligations.
As India’s markets continue to deepen and attract public capital, such enforcement actions serve as a warning signal to boards and compliance functions: shortcuts around disclosure and governance can be expensive—both reputationally and financially.