SEBI’s revised settlement framework distinguishes between recovery of funds allegedly diverted or siphoned from a company and the monetary amount payable for settling regulatory proceedings.
The distinction is particularly relevant in cases involving alleged fund diversion, where repayment or recovery of money belonging to the company would not, by itself, replace the applicable settlement amount or disgorgement obligation.
Under the revised approach, the settlement amount is determined using the prescribed framework, taking into account the nature of the alleged regulatory defaults and the requirements for resolving the proceedings. Legal practitioners have highlighted that recovery of diverted funds and payment made for regulatory settlement may therefore operate as separate components. CASansaar