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More empowered, Sebi gears up to regain fines from 1,300 defaulters

More than 1,300 entities have defaulted in penalty payments to Sebi, which is now gearing up to exercise its newly granted powers of attaching bank accounts and other assets for recovery of outstanding dues pending for up to 13 years.

Some of the defaulters have refused to pay up amounts as small as Rs 15,000, while the majority of individual penalties are worth a few lakhs of rupees. Together, these 1,337 individuals and companies have defaulted on penalties totalling about Rs 120 crore.

Earlier Sebi had to take a lengthy legal process for recovery of such payments but has now been granted powers to swoop on the defaulters through actions like attachment of assets and can even order their arrest.

Through an ordinance promulgated by the government last month, Sebi officials have also been empowered  to seek the assistance of   the  local administration for recovery of such pending penalties.

Besides, it can order attachment and sale of the defaulter's bank accounts, movable and immovable properties, as also arrest of the concerned person and his/ her detention in prison.

These powers can be exercised by Sebi if a person fails to pay the penalty imposed by the adjudicating officer or fails to comply with a direction of disgorgement order issued by the regulator or fails to pay any fees due. Besides, Sebi has also been given powers to pass disgorgement orders for recovery of wrongful gains, while special courts would be set up to fast-track the cases related to contravention of securities laws.

Sebi chairman U K Sinha had recently said that the market regulator would use these newly vested powers to recover money from offenders and give it back to the affected investors.
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