SEBI Imposes ₹20 Lakh Penalty on Arun Panchariya in Winsome Yarns GDR Case after SAT Remand
Moneylife Digital Team 29 April 2026
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹20 lakh on Arun Panchariya in connection with the fraudulent global depository receipts (GDR) issue of Winsome Yarns Ltd, following multiple rounds of litigation and remand directions from the securities appellate tribunal (SAT). 
 
In its final order dated 28 April 2026, SEBI recomputed the penalty after SAT directed it to reconsider the quantum, noting inconsistencies with penalties imposed in similar GDR cases. 
 
The case pertains to a fraudulent GDR scheme involving the issuance of GDRs worth about US$13.24mn (million) by Winsome Yarns. SEBI found that Mr Panchariya played a key role in structuring the transaction, particularly in the first leg, where GDRs were subscribed through entities connected to him, creating a misleading impression of genuine foreign investor participation. 
 
However, the extent of his involvement in the second leg of the transaction, the conversion of GDRs into shares and their sale in the Indian market, remained contentious. SAT, in multiple orders, held that there was insufficient evidence, particularly in the absence of a clear money trail, to conclusively establish his role in this phase. 
 
Earlier, SEBI had imposed a penalty of ₹25 crore in 2020, which was later reduced to ₹15 crore in 2024 after the first remand. Both these orders were challenged before SAT which repeatedly directed SEBI to reassess the penalty in light of proportionality and precedents in similar cases. (Read: Winsome Yarns GDR Issue: SEBI Slaps Rs15 Crore Penalty on Arun Panchariya)
 
Taking into account SAT’s observations, SEBI noted that penalties in comparable GDR matters often involving larger amounts were significantly lower, typically around ₹20 lakh. It also considered that the GDR proceeds had eventually returned to the company and that no definitive evidence established that Panchariya received proceeds from the alleged fraudulent trades. 
 
SEBI further observed that while Mr Panchariya role in the first leg of the fraudulent scheme stood established, the lack of conclusive proof regarding gains from the second leg warranted a more proportionate penalty. 
 
Accordingly, exercising its powers under Section 15HA of the SEBI Act, the regulator imposed a penalty of ₹20 lakh on Mr Panchariya.
 
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