Market regulator Securities and Exchange Board of India (SEBI), has reduced the penalty imposed on Arun Panchariya to ₹20 lakh, sharply cutting it from the earlier penalty of ₹67 crore levied in connection with the global depository receipt (GDR) issue of Winsome Textiles Industries Ltd. The reduction follows directions issued by the securities appellate tribunal (SAT).
In an order, Biju S, quasi-judicial authority of SEBI, says, "I note that Mr Panchariya, the noticee, is involved in multiple fraudulent GDR issues, and the findings of SEBI in respect of modus operandi adopted by the noticee have also been upheld and affirmed by the Supreme Court. I also note from the SAT order that it was argued by the counsel on behalf of SEBI that a penalty is imposed based on the consideration of the facts of the particular case. However, the SAT has cited three other orders of SEBI's adjudicating officers (AOs) where a penalty of ₹20 lakh was imposed, despite the GDR amount involved being significantly more than the amount involved in the present case... Considering the benchmark set by SAT and taking into account the penalties imposed in similar matters, I am of the considered view that the penalty may be reduced.”
The case traces its origins to a SEBI order dated 15 December 2021, which had held Mr Panchariya and 17 other entities liable for fraudulent practices linked to the GDR issue of Winsome Textiles, amounting to US$9.99mn (million).
In that order, SEBI had imposed a penalty of ₹67 crore on Mr Panchariya, citing his alleged key role in structuring and executing the GDR transaction and the purported illegal gains arising from the misuse of GDR proceeds.
Mr Panchariya challenged the SEBI order before SAT. In its order dated 15 October 2025, the tribunal partly allowed the appeal and set aside both the direction for disgorgement and the ₹67 crore penalty imposed on him.
SAT held that while Mr Panchariya was involved in the first leg of the GDR transaction, where GDRs were subscribed using loan proceeds secured against the same GDRs, there was no evidence establishing his involvement in the second leg involving the transfer, conversion and sale of GDRs in the Indian securities market.
The tribunal also noted significant inconsistency in the penalties imposed by SEBI in comparable GDR cases and remanded the matter to the regulator solely for reconsideration of the quantum of penalty.
Pursuant to SAT’s directions, SEBI granted Mr Panchariya an opportunity for a personal hearing and examined his written submissions. He argued that the earlier penalty was grossly disproportionate, violated the doctrine of proportionality and ignored precedents where much lower penalties often capped at ₹20 lakh were imposed even in larger GDR cases.
Mr Panchariya also relied on multiple SAT orders in which penalties on companies and directors arising from the same 2021 SEBI order were substantially reduced, reinforcing his argument for parity and consistency.
In its fresh assessment, SEBI acknowledged that SAT had conclusively held Mr Panchariya liable only for the first stage of the alleged fraudulent scheme. SEBI also noted SAT’s observation that Winsome Textiles had received the balance GDR proceeds and that there was no finding showing the proceeds from share sales were ultimately received by Mr Panchariya.
While SEBI observed that Mr Panchariya had been involved in multiple GDR-related violations and that his modus operandi had been upheld by higher judicial forums, it accepted that the ₹67 crore penalty was not aligned with SAT’s benchmarks. Accordingly, SEBI modified its 15 December 2021 order and imposed a reduced penalty of ₹20 lakh under Section 15HA of the SEBI Act, 1992, bringing the remanded proceedings to a close.
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