SEBI categorizes dues worth Rs 67,228 Crore as “hard to collect”

New Delhi:

Capital market regulator Securities and Exchange Board of India (Sebi) segregated dues of Rs 67,228 crore in the “hard to recover” category at the end of March 2022.

Overall, the regulator has dues worth Rs 96,609 crore to be recovered from entities including those that have failed to pay the fine imposed on them, have failed to pay the market watchdog fees and have not complied with its instruction to to repay investors’ money, according to Sebi’s annual report for 2021-22.

Of Rs 96,609 crore, the regulator said that Rs 63,206 crore, which is 65 percent of the total, relates to Collective Investment Scheme (CIS) and is deemed to be public issues of PACL Ltd and the Sahara Group company – Sahara India Commercial Corporation Ltd.

Also, Rs 68,109 crore, representing 70 percent of the total dues, is subject to parallel proceedings before various courts and court-appointed committees. In these cases, Sebi’s recovery procedures are subject to instructions from the respective courts or committees.

In its annual report, the regulator classified the dues valued at Rs 67,228 crore as difficult to recover (DTR).

Sebi defined DTR and said that this dues cannot be recovered even after all means of recovery have been exhausted.

It was clarified that the segregation of such DTR entitlements is purely an administrative act and that this does not prevent the recovery officers from recovering the amount so segregated as DTR if and when there is a change in any of the DTR parameters from the recovery point of view.

The Securities and Exchange Board of India (Sebi) is authorized to recover fines imposed by the Adjudicating Officer, the amount to be paid out and the money to be repaid to the regulator.

The market watchdog also picked up no fewer than 59 new cases related to securities violations for investigation in 2021-22, which is far fewer than 94 cases picked up in the previous fiscal year.

The cases related to alleged violations of securities laws, including market manipulation, price manipulation and insider trading.

“During 2021-22, 59 new cases were picked up for investigation and 169 cases were closed compared to 94 new cases arrested and 140 cases closed in 2019-20,” the report said.

Out of a total of 59, no fewer than 38 cases under investigation involved market manipulation and price manipulation; 17 insider trading cases and the remaining four related to other securities law violations.

Sebi will initiate an investigation based on reference received from sources such as the Integrated Surveillance Department, other operational departments, and external government agencies.

“The purpose of the investigation is to collect evidence and to identify persons/entities behind irregularities and violations so that appropriate and appropriate regulatory action can be taken where necessary,” the annual report said.

The steps involved during the research process include the analysis of market data such as order and trade log, transaction statements and stock market report.

Sebi also analyzed banking data such as account and Know Your Customer (KYC) data, information about a company, data from telephone calls and information obtained from market intermediaries during the investigation process.

After an investigation was completed, the watchdog said, criminal prosecutions were made where violations of securities laws and obligations related to the securities market were found.

In the period 2021-2022, the regulator took enforcement action in 176 cases and settled 226 cases. At the end of March 2022, 426 cases were pending.

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