SEBI Classifies Dues Worth Nearly Rs 80,000 Crore As "Difficult To Recover"

Capital markets regulator Sebi has segregated dues to the tune of Rs 76,293 crore under "difficult to recover" category at the end of March 2024, marking an increase of 4 per cent from the preceding year.

Of this, a huge chunk is on account of cases pending before court-appointed committees.

Difficult to recover (DTR) dues are those that could not be recovered even after exhausting all modes of recovery.

"Segregation of such DTR dues is purely an administrative act and this will not preclude the recovery officers from recovering the amount so segregated as DTR as and when there is a change in any of the DTR parameters," Sebi said in its annual report for 2023-24.

As of March 31, 2024, Sebi identified 807 cases as DTR, with a total outstanding of Rs 76,293 crore, up from 692 cases amounting to Rs 73,287 crore the previous year, according to the report.

Among these 807 cases, 36 are pending due to ongoing proceedings in State PID courts, National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) involving Rs 12,199 crore.

Additionally, 60 cases are before court-appointed committees, with Rs 59,970 crore at stake.

These two categories together account for 95 per cent of the total amount yet to be recovered.

With regard to 140 DTR certificates falling under untraceable category, 131 relate to individuals and nine relate to companies amounting to Rs 13.3 crore and Rs 15.7 crore, respectively.

The Sebi has been disseminating data on the composition of difficult to recover cases from 2021-22 onwards through its annual report in order to enhance transparency of its enforcement proceedings.

The markets regulator said a total of 6,781 recovery certificates were generated till March 31, 2024, of which 3,871 recovery certificates were pending as on March 31, 2024.

Overall, the markets watchdog has dues worth Rs 1.03 lakh crore that needs to be recovered from entities, including those that failed to pay the fine imposed on them, or were unable to pay the fees due to it and did not comply with its direction to refund investors' money.

"Of the total amount of Rs 1,02,830.75 crore to be recovered, Rs 63,206 crore (which is 61.5 per cent of the total amount due) pertains to CIS (Collective Investment Scheme)/DPI (Deemed Public Issue) matters of PACL Ltd and Sahara India Commercial Corporation Ltd, respectively," Sebi said.

The Securities and Exchange Board of India is empowered to recover penalties imposed by the adjudicating officer.

The markets watchdog took up 342 new cases, pertaining to flouting securities law, for investigation during 2023-24, which was way higher than 144 cases taken up in the preceding financial year.

The cases were related to alleged violation of securities law, including market manipulation, price rigging and insider trading.

"During 2023-24, 342 cases pertaining to various violations of securities laws were taken up for investigation and 197 cases were completed," Sebi said.

Of these, 174 cases taken up for investigation were related to market insider trading, 160 for market manipulation and price rigging and the remaining seven for violations of securities law.

Sebi initiates investigation based on reference received from sources such as its integrated surveillance department, other operational departments and external government agencies

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