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March 28, 2001
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Money > Business Headlines > Report March 28, 2001 |
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Sebi lists out penalty powersAshwin J Punnen The Securities and Exchange Board of India (Sebi) has submitted a proposal to the government seeking wider powers to impose higher penalties, penal action against erring companies and civil court powers. Sebi has sought these powers making amendments in various Acts including Securities Contract Act (SCRA), Sebi Act and depository Act. It has sought powers to impose penalties up to a maximum of three times of amount involved in a scam or any market manipulations. At present, the maximum penalty Sebi could impose is only Rs 500,000 which is relatively small compared to the dimension of scam involved in the market. Sebi wanted powers to penalise companies, which fail to meet various provisions under the listing agreements of stock exchanges. Sebi said it should be given powers impose penalties up to a maximum of Rs 2.5 million for non-compliance of listing agreement. At present there is no provision under SCRA to impose penalties against companies for non-compliance of the listing agreement. Sebi has sought amendment of powers to impose penalties against erring companies as it is imposing corporate governance provisions through listing agreement of exchanges. Sebi has also sought amendment in the Depository Act in order to take action against depositories, depository participants failing to meet investor grievance. Sebi has sought power to impose penalties up to a maximum of Rs 10,000 against depositories and DPs, which fail to meet investor grievances. Sebi has also sought powers to seize documents like book of account and retain them it for a period of six months for examination. It also wanted powers to give direction to various intermediaries like lawyers and chartered accountants by expanding the list of intermediaries under section 11 B of Sebi Act. Sebi has also sought civil court powers to summon persons and seek information for the purpose of investigations. The finance ministry had recently asked Sebi to submit what specific powers it wanted and changes required in various Acts following the finance minister's recent announcement in Parliament that it could be given powers to provide better investor protection.
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