IRDAI imposes Rs 1 crore fine on Go Digit General Insurance

8 May 2024 , 03:53 PM

 Insurance Regulatory and Development Authority of India (IRDAI) has penalized Go Digit General Insurance with a fine of ₹1 Crore for non-disclosure of change in the conversion ratio of compulsorily convertible preference shares (CCPS).

Go Digit's parent company, Go Digit Info Works Services (GDISPL), issued 63,00,000 CCPS to Fairfax Group-owned FAL Corporation, later revised to 78,00,000 CCPS with a changed conversion ratio.

Although Go Digit disclosed this change in its joint venture (JV) agreement amendment and Draft Red Herring Prospectus (DRHP) filing, it failed to provide full particulars to IRDAI, violating Section 26 of the Insurance Act. Go Digit admitted to the inadvertent non-submission of the JV Agreement Amendment to IRDAI and withdrew its request for a personal hearing.

The delay in filing JV Amendment particulars and material changes in CCPS issuance prompted IRDAI to impose the penalty. FAL Corporation, owned by Canada-based Fairfax Financial Holdings, holds 45.3% of GDISPL, with the rest owned by Kamesh Goyal and Oben Ventures LLP.

Digit Insurance, with an 83.47% stake held by GDISPL, is also impacted by the shareholding changes. Go Digit plans to launch its IPO soon after receiving approval in March 2024, aiming to raise ₹1,500 Crore, with Virat Kohli and Anushka Sharma listed among its shareholders as per the DRHP.

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