New Delhi : Armed with new powers to clamp down on illegal money-pooling schemes and other defaults, Sebi today said offenders can no longer ignore its orders and drag on the cases for years as the new law would fast-track action against them and ensure refund of money to investors.
These additional powers, as also setting-up of a special Sebi court, would ensure that fraudsters do not go scot-free and the regulator is be able to initiate recovery proceedings against them and even conduct search and seizure operations at defaulters’ premises, Sebi chief U K Sinha said.
There should be a sea-change from the earlier occasions when offenders would tend to “ignore orders from Sebi” and the legal cases would drag on for years without recovery of any money, Sinha told PTI in an interview.
“The cases have gone for 10-15 years and there no money has been recovered. So except for a little bit of ‘naming and shaming’ for individual or a company, it did not have much impact on them,” he said.
After clearance from Parliament earlier this month, the government has notified the Securities Laws Amendments Act, which empowers capital markets watchdog Sebi to take action against all unregulated money-pooling schemes involving Rs 100 crore or more.