As SEBI expedites its efforts to recover penalties imposed on defaulters and manipulators, the number of attachment proceedings launched by the market regulator has reached the 400-mark.
The capital markets watchdog began initiating attachment proceedings against defaulters, including individuals and companies, in October last as per the greater powers granted to it through an ordinance promulgated by the government.
Since then, the Securities and Exchange Board of India (SEBI) has launched 400 attachment proceedings for recovery of penalties imposed in as many as 87 cases.
These proceedings involve attachment of bank accounts, movable and immovable properties, shares and debentures, among others.
These cases involved recovery of collective penalties totalling close to Rs. 2,000 crore imposed on various entities in matters related to violations of capital market norms.
In some cases, the attachment orders have been revoked after the concerned entities made the outstanding payments.
One of the attachment orders which has been revoked was passed against MTZ Polyfilms after the company paid the entire dues of Rs. 1 lakh. SEBI had appointed D.V. Sekhar as recovery officer in this case.
The latest order, concerning attachment proceeding number 400, is related to the Pyramid Saimira case. Incidentally, the first few attachment orders in October 2013 were also related to the same case.
The 400th attachment proceeding has been initiated for recovery of penalties worth Rs. 1.27 crore from Pyramid Saimira former promoter P.S. Saminathan.
On October 10, 2013, SEBI had ordered banks to attach the accounts of Mr. Saminathan who was penalised for various market norms violations including fraudulent trading activities. As he had failed to pay the dues, the regulator yesterday, for the time, issued an order for attachment of property.
As per a government ordinance, the Securities and Exchange Board of India (SEBI) has been granted powers to pass orders like search and seizure, attachment of properties, arrest and detention of defaulters.
The ordinance was earlier promulgated by President Pranab Mukherjee on July 18, 2013 after the Cabinet gave its approval to amend the SEBI Act, 1992. The ordinance was re-promulgated on September 16 and again on March 29.
Besides bank accounts, SEBI has also in various proceedings ordered depositories — NSDL and CDSL —— to attach the demat securities accounts of the erring entities.