Securities and Exchange Board of India (Sebi) chairman UK Sinha on Tuesday said the regulator is cracking down on illegal schemes floated by companies to raise money from retail investors. He was speaking at the launch of an investor education programme here.
Sinha said, in the last two years, the capital market regulator has issued 225 orders against entities collecting money illegally from investors. Sebi, according to Sinha, has also issued 670 cease-and-desist orders against entities in 2014-15 , up 223.6% from 2013-14.
“We are getting into the enforcement area much more seriously,” said Sinha.
A cease-and-desist order prohibits a person or entity from entering the securities market. Sinha said Sebi is also focusing on creating awareness among investors.
In the last three years Sebi has launched 25,000 investor awareness programmes and has sent around 400 resource persons to schools and colleges in smaller towns of the country to educate investors.
“By the end of this year, our target is that, in each and every district of this country, we will have one resource person. This is the direction in which we are moving,” said Sinha.
Allaying fears of low investor participation in the Indian market, Sinha said with Employees’ Provident Fund Organisation investing workers’ money in the market, more pension funds are likely to begin investing in the market this year.
“Once the institutional money where the combined lifelong savings of workers start coming into the market, we will make a lot of progress. If you look around the world, you will find that even in the developed world, the industry has progressed only when the retirement savings have started coming into the market. So, I regard 2015 as a very important year for pension money to come in the markets,” said Sinha.
Sebi orders freezing of bank and demat accounts of 11 companies
Sebi has ordered attachment of bank as well as demat accounts of 11 companies and seven individuals to recover dues worth over R2 crore for violations of norms.
The firms against which Sebi has passed attachment orders are Trident India, Hindustan Creamics, Lakshya Securities & Credit Holding, SGI Research & Analysis, UP Mineral Products, Mahadev Corp, Mahadev Agro Industries, Chinar Exports, Intecon, Marnite Polycast and Basi Investments.
The pending dues include fines imposed on the companies along with interest and other costs.
Similarly, the regulator has directed depositories — NSDL and CDSL — to attach all demat accounts of the defaulters.
(with agency inputs)