SEBI chief acts quick; reconstitutes, extends tenure of advisory panel for settlement proceedings

According to the SEBI’s annual report for FY24 -- the FY25 report is yet not released – the regulator received a total of 434 applications for settlement and it disposed 114 applications while 169 applications were either returned, rejected or withdrawn.

In a move that would provide the much-needed continuity in passing of settlement orders, the Securities and Exchange Board of India (SEBI) has extended the tenure of the members of the ‘High Powered Advisory Committee on settlement orders and compounding of offences’.

According to people familiar with the matter, the chairman along with two other members have been given an extension of two years. Former whole-time member M S Sahoo who was also part of the committee has conveyed his decision to step down due to other engagements.

Sahoo’s place, however, will be filled by another former whole time member of SEBI, said a person familiar with the development. Sahoo has also served as the former chairperson of the Insolvency and Bankruptcy Board of India.

This assumes significance as the committee plays an important role in the settlement order process as only if the panel clears the settlement terms, the case goes to a whole-time member of SEBI for final approval.

The panel was formed in January 2022 with a three-year term, which ended earlier this year in January. While retired chief justice of Calcutta High Court Jai Narayan Patel heads the committee, the two other members who have got an extension along with the chairman are former law secretary P K Malhotra and former CEO and managing partner of Deloitte India N Venkatram.

The extension comes at a time when the capital market regulator under the new chairman Tuhin Kanta Pandey is in the midst of important settlement proceedings involving big names of India Inc including Adani Group and Paytm among others.

As such, settlement proceedings have become an important part of SEBI’s overall enforcement actions. According to the SEBI’s annual report for FY24 -- the FY25 report is yet not released – the regulator received a total of 434 applications for settlement and it disposed 114 applications while 169 applications were either returned, rejected or withdrawn.

Further, for the 114 applications settled during the year, SEBI collected Rs 94.51 crore towards settlement charges, as per the annual report.

Incidentally, the regulator had collected higher settlement charges – Rs 125.6 crore – in FY23 even as the total number of settlement applications was lower at 386 though the number of cases disposed was higher at 185.

An email query sent to SEBI regarding extension and the reconstitution of the committee remained unanswered till the time of publishing this story.