SEBI Cuts Rs 67-Crore Penalty On GDR Subscriber In Winsome Textile Case To ₹20 Lakh

The Securities and Exchange Board of India (SEBI) has reduced the penalty on Arun Panchariya from Rs 67 crore to Rs 20 lakh in the Winsome Textile Industries GDR case, following a remand by the Securities Appellate Tribunal

SEBI's Quasi Judicial Authority, Biju S, passed the order after reconsidering the quantum of penalty in light of the findings and directions issued by the SAT.

The regulator had, in December 2021, passed an order against Panchariya and 17 others in connection with the GDR issue and imposed a penalty of Rs 67 crore on him.

It was alleged that the company, along with Panchariya, issued GDRs worth USD 9.99 million in a manner that falsely showed foreign investment, as the GDRs were subscribed to by an entity owned by Panchariya.

The GDRs were later converted into shares and sold in the Indian market, though the SAT found that Panchariya was not involved in this subsequent stage.

Aggrieved by the order, Panchariya approached the SAT.

The tribunal held that Panchariya was involved only in the initial stage of the GDR fraud relating to the subscription of the GDRs and not in the subsequent conversion and sale of shares.

The tribunal therefore set aside the directions on disgorgement and the penalty, and sent the matter back to SEBI to reconsider the quantum of penalty.

Pursuant to this, SEBI issued a fresh notice of hearing to Panchariya in November 2025.

Panchariya contended that the penalty imposed on him was excessive and contrary to the principle of proportionality.

SEBI noted that the SAT had found no material to show that the proceeds from the sale of shares were eventually received by Panchariya and had observed that the penalty of Rs 67 crore was disproportionate, particularly when compared with other GDR matters where penalties of ₹20 lakh were imposed despite larger GDR issues.

Taking into account the SAT's directions, penalties imposed in similar cases, and the benchmark laid down by the tribunal, SEBI held that the quantum of penalty required to be reduced.

“Considering the benchmark set by Hon'ble SAT and taking into account the penalties imposed in similar matters, I am of the considered view that the penalty may be reduced,” it held.

Accordingly, SEBI reduced the penalty imposed on Panchariya from Rs 67 crore to Rs 20 lakh.