Investors will now be able to get their money back, says Sinha
Armed with powers to prosecute errant companies and their promoters for duping investors, stock market regulator Securities & Exchange Board of India (SEBI) said it would now be able to recover money from offenders. SEBI said that around Rs. 125 crore in penalties imposed by it were yet to be recovered.
With the government recently promulgating an Ordinance vesting more search and seizure powers with SEBI, investors would now be able get their money back.
SEBI chairman UK Sinha, while addressing an investors awareness programme in Navi Mumbai on Wednesday, said, “Earlier, we were able to bar companies from raising money or banning promoters from taking directorship or imposing penalty but couldn't recover money. Now, we can recover the money.”
On the SEBI’s action against companies mobilising public deposits without due permission, Mr Sinha said the market regulator had launched 550 prosecution case against people for collecting money illegally. Out of which, 130 had been booked and 15 companies banned.
He said SEBI had also taken action against 400 companies for not joining its grievance solution systems.
Union Minister for Corporate Affairs Sachin Pilot, who also spoke at the function, said that priority must be given to recover money from those responsible for duping investors through illegal ponzi schemes. Care should be taken to prevent such instances through investor awareness programmes, he added.
“The priority should be before such scams breakout. It's futile to go after the people after the scams. The priority should be to recover that money. It is important for us to seize those assets which are ill-gotten,” Mr. Pilot said.