Market regulator Sebi has ordered attachment of bank and demat accounts of individuals and companies to recover penalties worth over Rs 18 crore slapped on them for violation of various securities law.
Among the bank and demat accounts that have been ordered to attach are those indicted for alleged irregularities in the IPO of Suzlon and IDFC.
As part of its recovery proceedings, the Securities and Exchange Board of India (Sebi) has served orders to several banks and depositories to attach the accounts of those who have not paid fines for violations of various securities market regulations.
All the notices have been served by Sebi during January 13-15.
These include attachment of bank and demat accounts for recovery of funds totalling more than Rs 18 crore, which includes Rs 15 crore for one single case involving a broker.
In one of the notices issued, 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 regulator on an individual, in case related to fraudulent activities in shares of Kolar Biotech.
Besides, the market watchdog has ordered attachment of bank and demat accounts of one Dhaval Mehta to recover over Rs 2.32 crore in the IPO fraud case of Suzlon and IDFC. Mehta had made unlawful gains in this fraud.
Also, Sebi has directed attachment of bank and demat accounts of Choksi Tube Company to recover Rs 24 lakh, Usha Ispat (Rs 20 lakh), Kriptol Industries (Rs 12 lakh), Gordon Herbert (Rs 10 lakh), Mukerian Papers (Rs 8 lakh) and Sonal Nithin Somani and Nithin Somani (Rs 6 lakh), among others.
"There is sufficient reason to believe that the defaulter may dispose of the amounts/securities in the bank/demat accounts and realisation of amount due under the certificate would be in consequence be delayed or obstructed," Sebi said in the notices.
It is further ordered with immediate effect that no debit would be made in these accounts until further orders from the market regulator, according to Sebi directives.
However, the credits, if any into the account maybe allowed, Sebi said.
Through an ordinance promulgated by the government, Sebi has been given direct powers to freeze bank accounts, attach properties, conduct search and seizure and initiate recovery proceedings. The ordinance has already been promulgated twice, the last being in September. However, the ordinance lapsed yesterday.
Sebi has been seeking these powers for long to better regulate markets and take to task the fraudsters and other defaulters more effectively.
Soon after the promulgation of the ordinance, Sebi began exercising these powers and has put in place necessary operational mechanism, including those requiring changes in the manpower deployment.
