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Sebi speeds up recovery drive

Mumbai, Nov. 23: Sebi has ordered recovery of over Rs 500 crore from defaulting/erring companies ever since the new search and seizure order was implemented two months ago.

“In the past two months that the search and seizure order has been in place, we have passed orders to recover more than Rs 500 crore.

“We have frozen a whole number of bank accounts. Though I don’t have the exact number of bank accounts frozen, a number of accounts and assets have been frozen worth over Rs 500 crore,” Sebi chairman U.K. Sinha told a capital markets summit organised by the Hyderabad-based Indian School of Business here.

In a major upgrade of powers given to Sebi, the government had on July 22 this year allowed the regulator to pass orders such as search and seizure, attachment of properties, arrest and detention of defaulters and pass disgorgement directions to recover the wrongful gains made in contravention of laws.

The government had also allowed Sebi to seek information from other regulators within the country and abroad with retrospective effect, paving way to collect details pertaining to cases pending for over 15 years now.

In another retrospective change, which forms part of the Securities Laws Amendment Ordinance promulgated early July, individuals and companies being probed by Sebi could settle their pending investigations. Such settlements could be undertaken in cases that are currently pending for more than six years.

To tackle the growing menace of Ponzi schemes being floated as collective investment schemes, the rules were also amended to classify any money collection of Rs 100 crore or more as a CIS operation.

Sebi had also been given powers to crack down on illegal investment schemes floated by individuals as well, against this being confined only to companies.

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