SEBI Issues Notice to PB Fintech Chairperson Over $2M Investment

PB Fintech Limited, the parent company of Policybazaar, has revealed that the Securities and Exchange Board of India (SEBI) has issued a show cause notice (SCN) to its Chairperson and CEO, Yashish Dahiya. The notice, dated June 05, 2024, concerns an investment made by PB Fintech FZ-LLC, Dubai, amounting to Rs 2 million (approximately $2 million USD) for a 26.72% stake in YKNP Marketing Management on November 17, 2022.

According to PB Fintech’s exchange filing, the transaction was not deemed ‘unpublished price sensitive information’ because of its non-material value. The SCN alleges violations of Clause 4(1) of Schedule B and Regulation 9A(2)(b) of SEBI (Prohibition of Insider Trading) Regulations, 2015.

“It is clarified that on account of the SCN, there is no material impact on financials, operations or other activities of the Company. Further, the Company is seeking legal advice to take appropriate steps with respect to the SCN in the due course of time,” PB Fintech stated.

The investment in YKNP Marketing Management has been strategically significant for PB Fintech FZ-LLC. The deal has provided the company access to UAE banks, enabling it to begin sourcing customers through the YKNP agreement and its field force. Additionally, YKNP’s strong business presence among the Arabic population has allowed PB Fintech to leverage a sales team proficient in catering to Arabic-speaking customers.

This notice comes on the heels of PB Fintech’s recent financial turnaround. In January, the company reported a net profit of Rs 37 crore for Q3 FY24, marking a significant improvement from the Rs 87 crore loss in the same period the previous year. The positive trend continued, with PB Fintech announcing a net profit of Rs 60.1 crore for the quarter ending March 31, 2024, representing a 62% increase from the previous quarter.

PB Fintech emphasized that the SCN does not affect the company’s robust financial health or its operational stability. “The Company is seeking legal advice to take appropriate steps with respect to the SCN in the due course of time,” reiterated the company in its statement.