Sebi orders bank accounts attachment in Pyramid Saimira case

Written by Press Trust of India | Mumbai | Updated: Oct 12 2013, 04:33am hrs
Market regulator Sebi has directed attachment of bank accounts of Pyramid Saimira's promoter P S Saminathan to recover penalties worth Rs 1.27 crore imposed on him for various violations, exercising its newly granted powers for the first time.

The long drawn case has seen Securities and Exchange Board of India (Sebi) penalising Saminathan for multiple violations, including non-compliance with disclosure norms and for indulging in fraudulent trading activities.

This is the first time that Sebi has ordered attachment of bank accounts of an entity who violated securities market rules, after it was granted those powers by the government earlier this year.

In similarly-worded notices of attachment of bank account to three lenders -- Allahabad Bank, HDFC and HSBC -- Sebi's recovery officer has directed them to attach Saminathan's accounts.

Further, "all other accounts by whatever name called of the defaulter, either singly or jointly with any other persons. All other amount/proceeds due or may become due to the defaulter or any other money held or may subsequently hold for or on account of defaulter," Sebi said in the notices issued on October 10.

It is further ordered with immediate effect that no debit would be made in these accounts until further orders from the market regulator, according to Sebi directives. However, the credits, if any into the account maybe allowed, Sebi said.

The move is part of Sebi's efforts to recover a total fine of Rs 1.27 crore "along with interest, all costs charges and expenses in respect of all proceeding for recovering the said sum against Saminathan and the same is due from him."

The watchdog now has powers to attach of properties and bank accounts, among other things, of persons and entities which have failed to comply with directions involving payment of penalties and other dues.

This year, Sebi in its orders had slapped Rs 7.5 lakh and another Rs 5 lakh on Saminathan for alleged non-compliance with disclosure norms.

Earlier, Sebi had imposed a fine of Rs 1.10 crore and another Rs 5 lakh on the promoter for indulging in fraudulent and unfair trade practices and violating market regulations.

The directions follow Sebi concerns that Saminathan "may dispose of the amounts/proceeds in the bank accounts" held with the banks and "realisation of amount due".

Besides, Sebi has asked banks to provide details of all accounts including lockers held by Saminathan, copy of account statements, confirmation of attachment of the said accounts.

As of March 31, 2013, more than 1,300 individuals and companies have defaulted in making the payments towards penalties imposed against them for various offences.

Collectively, these defaulters, which include listed companies, brokers, merchant bankers and others, are required to pay about Rs 120 crore to Sebi.