Description

SEBI's final order imposing penalty on Arun Panchariya following SAT remand for re-examination of quantum of fine in the fraudulent GDR subscription case involving Winsome Textile Industries Ltd.

Summary

SEBI issued a final order against Arun Panchariya (PAN: AEVPP6125N) pursuant to Securities Appellate Tribunal’s (SAT) order dated October 15, 2025, which remanded the matter for re-examination of the penalty quantum. The original SEBI order dated December 15, 2021 had imposed a penalty of Rs. 67 crores on the noticee in connection with fraudulent GDR issuance by Winsome Textile Industries Ltd. SAT set aside the disgorgement direction and the Rs. 67 crore penalty, directing SEBI to reconsider the quantum of fine with an even hand approach, noting that the noticee was involved only in the first stage of fraud (subscription of GDR by Vintage using GDR proceeds as security for loan).

Key Points

  • Original SEBI order dated December 15, 2021 imposed penalty of Rs. 67,00,00,000 on Arun Panchariya
  • SAT vide Appeal No. 21 of 2023 allowed the appeal on October 15, 2025
  • SAT found noticee involved only in first stage of fraud (GDR subscription mechanism)
  • Disgorgement direction set aside completely by SAT
  • SAT directed SEBI to re-examine penalty quantum noting disparity with other cases
  • GDR amount involved: USD 9.99 million
  • SAT observed that in cases with double the amount, SEBI imposed only Rs. 20 lakhs penalty
  • Notice of hearing issued on November 19, 2025 for December 09, 2025
  • Adjournment requested by noticee’s AR on December 04, 2025

Regulatory Changes

No new regulatory changes. This is an enforcement action under existing provisions of:

  • Sections 11(1), 11(4), 11(4A), 11B(1), 11B(2) and 15-I of SEBI Act, 1992
  • Sections 12A(2) and 23-I of Securities Contracts (Regulation) Act, 1956

Compliance Requirements

The noticee (Arun Panchariya) is required to:

  • Participate in fresh penalty determination proceedings as directed by SAT
  • Submit written submissions in response to SEBI’s notice of hearing
  • Comply with the revised penalty quantum to be determined by SEBI upon re-examination

Important Dates

  • December 15, 2021: Original SEBI order imposing Rs. 67 crore penalty
  • October 15, 2025: SAT order remanding matter to SEBI
  • November 19, 2025: SEBI notice of hearing issued
  • December 04, 2025: Adjournment requested by noticee’s AR
  • December 09, 2025: Original hearing date (adjourned)

Impact Assessment

This order has limited market-wide impact as it pertains to a specific enforcement matter involving Winsome Textile Industries Ltd’s historical GDR issuance fraud. The significance lies in establishing precedent for penalty proportionality in GDR fraud cases. SAT’s direction for SEBI to adopt an “even hand” approach in penalty imposition may influence future enforcement actions. The substantial reduction from Rs. 67 crores (pending re-determination) signals judicial oversight on penalty quantum calibration based on the extent of involvement in multi-stage fraud schemes.

Impact Justification

Enforcement action following SAT remand to re-examine penalty quantum. Original penalty of Rs. 67 crores was set aside for reconsideration. Limited to specific noticee in historical fraud case.