Sebi has ordered attachment of bank and demat accounts of stock broker Rajkumar C Basantani, to recover Rs 15 crore, one of the highest penalties imposed by the market regulator on an individual, in a case related to fraudulent activities in shares of Kolar Biotech Ltd.
Back in November 2008, Securities and Exchange Board of India (Sebi) had penalised Basantani, one of the promoter's of Kolar Biotech, for making false and misleading advertisements to the public in order to bring about an increase in the price of the shares of the company.
Exercising its new powers to recover penalties from defaulters, Sebi in an attachment notices dated January 13 has directed all the banks in the country to attach accounts held by Basantani with immediate effect.
Besides, Sebi has asked the two depositories -- National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) -- to attach the demat account which hold the securities of the defaulter.
Stating that it had "sufficient reason" to believe that the defaulter may dispose of the amount and securities held in the bank and demat accounts respectively, the market regulator has ordered banks and depositories to attach "all accounts by whatever name called of the defaulter, either singly or jointly with any other persons".
Sebi has also asked banks to attach the lockers held by Basantani as well as "all other amount/proceeds due or may become due to the defaulter or any other money held or may subsequently hold for or on account of defaulter".
It has further ordered the banks and depositories that with immediate effect no debit would be made in these accounts until further directions from the market regulator.
However, the credits, if any into the account maybe allowed, Sebi said.
Besides, the regulator has also asked for details of the accounts held by Basantani, copy of his account statements, among others.
In 2008, Sebi had found that Basantani had made use of an entire gamut of people and created corporate entities solely for the purpose of facilitating his carefully planned fraud upon investors.
Accordingly, Sebi had found Basantani to be the "mastermind" behind the entire scheme and slapped a penalty of Rs 15 crore on him.
Sebi had said that Basantani acts were "a manipulative device/ scheme/ artifice which was meant to defraud investors regarding dealings in the scrip of Kolar Biotech Ltd...".
The market regulator was recently given powers to attach properties and bank accounts, among other things, of persons and entities which have failed to comply with directions involving payment of penalties and other dues.
