SEBI freezes bank accounts of three brokers
19 Oct 2013
The Securities & Exchange Board of India has ordered the attachment of the bank accounts of three individual stock market traders to recover penalties worth over Rs12 crore for irregularities in initial public offers (IPOs) in various firms between 2003-05.
The market regulator announced today that it has imposed penalties on Roopalben Nareshbhai Panchal, Arjav Nareshbhai Panchal and Biren Kantilal Shah for cornering shares in the IPOs of IDFC, NTPC, Tata Consultancy Services, Suzlon Energy, and Yes Bank, among others.
Armed with greater powers to deal with defaulters, SEBI recently began directing attachment of bank accounts to recover penalties from entities that violated capital market norms.
In similarly-worded notices of attachment dated 17 October, SEBI has asked 11 banks including ICICI Bank, Bank of Baroda, HDFC Bank, IDBI Bank, Indian Overseas Bank and Standard Chartered Bank to 'attach' [freeze] the accounts of the three individuals.
SEBI has further ordered the banks not to allow any debit in these accounts until further orders. However, the regulator has allowed for credits into the accounts.
"There is sufficient reason to believe that the defaulter may dispose of the amounts/proceeds in the bank accounts," SEBI said in a statement.
It has also asked banks "for all other accounts by whatever name called of the defaulter, either singly or jointly with any other persons".
The move is part of SEBI's efforts to recover a total of Rs12.31 crore "along with interest, all costs charges and expenses in respect of all proceeding for recovering the said sum" against these three entities and the same is due from them.