© Reuters.
As Go Digit General Insurance prepares for its initial public offering (IPO), the company has come under the regulatory lens. The Insurance Regulatory and Development Authority of India (IRDAI) issued a show cause notice to the insurtech firm on November 6, alleging non-disclosure of critical information. The notice claims that Go Digit’s holding company, GDISPL, failed to inform FAL Corporation—a subsidiary of Fairfax Financial Holdings (OTC:), Canada—about changes in the conversion ratio of Compulsorily Convertible Preference Shares (CCPS). This oversight could potentially violate provisions of the Insurance Act.
The alleged infringement has put Go Digit in a precarious position as it advances towards listing on the stock market. The regulator has outlined stern penalties for non-compliance, which could include daily fines of up to ₹1 lakh or a one-time penalty reaching ₹1 crore, whichever is lower.
Go Digit has submitted a response to the IRDAI’s allegations. The outcome of this dispute remains uncertain with a final decision from the regulatory body still pending.
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