As the government readies a new bill for empowering Sebi to take on fraudsters and defaulters, the number of attachment orders passed by the capital markets watchdog with the help of an ordinance has crossed 1,300-mark for recovery of penalties and dues in nearly 400 cases.
The ordinance, which had to be promulgated thrice to empower Sebi to pass attachment orders and launch recovery proceedings against fraudsters and market manipulators, including those running illegal deposit schemes, lapsed today.
To ensure that the Securities and Exchange Board of India (Sebi) retains powers to act against fraudsters and other defaulters, the government is readying a new Securities Laws (Amendment) Bill, 2014, sources said.
A proposal in this regard would soon be placed before the Union Cabinet and the bill would be subsequently introduced in the Parliament for passage, they said, while adding that the new Bill could be different from the Ordinance and would have more safeguards to balance the new powers for Sebi.
The proposed bill would amend three Acts – the Sebi Act, 1992, the Securities Contracts (Regulation) Act, 1956, and the Depositories Act, 1996 which govern the entire gamut of regulating the Indian capital markets.
Before the expiry of the third ordinance, an emergency measure initiated when the Parliament is not in session, the regulator managed to launch at least 1,358 attachment proceedings in 389 different cases for recovery of well above Rs 1,600 crore worth assets from banks and demat accounts of hundreds of defaulters.
The proceedings in these cases would continue irrespective of the ordinance having lapsed. In the last week itself, more than 100 attachment orders were passed by Sebi, while at least 68 such proceedings were initiated in a single day on July 17.