Attach bank, demat accounts to recover due amount in Avon Corp case: Sebi

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Markets regulator Sebi on Tuesday ordered attachment of bank accounts as well as shares and mutual fund holdings of an individual to recover dues totalling around Rs 1.13 crore.

The recovery proceedings have been initiated against one Pankaj Saraia after he failed to pay fine imposed on him by Securities and Exchange Board of India (Sebi) in April 2020.

Sebi had levied a fine of Rs 1 crore on Saraia in a case pertaining to manipulation in issuance of global depository receipts (GDRs) of Avon Corporation.

Saraiya was chairman, managing director and chief executive officer of Avon at the time of violation. Avon had come up with GDR issues in June 2009.

In an attachment notice on Tuesday, Sebi has ordered attachment of bank as well as demat accounts of the individual to recover the pending dues.

The pending dues of Rs 1.13 crore comprises initial penalty amount, interest and recovery cost, it added.

Sebi asked banks and depositories not to allow any debit from their accounts. However, credits have been permitted.

Further, the capital markets watchdog has directed the banks to attach all accounts, including lockers, held by them.

The regulator said there is sufficient reason to believe that the defaulter (Saraiya) may dispose of the amounts in the bank accounts and securities in the demat accounts and "realisation of amount due under the certificate would in consequence be delayed or obstructed".

In a notice to all banks in the country, the regulator ordered to "attach with immediate effect...all accounts by whatever name, including lockers of the defaulter, held either singly or jointly with any other person, in your bank".

The regulator has also asked banks, depositories and mutual funds to provide details of all accounts held by Saraia, including copy of account statements. It has also sought complete information of all loan accounts and advances.

In separate orders, the regulator has attached bank and demat accounts of Narendra Kumar Rathore and H Bhavesh Securities to recover Rs 8.67 lakh and Rs

5.45 lakh, respectively in two different cases.

The pending dues consists of initial penalty amount, interest and recovery cost, the orders noted.

The regulator levied a Rs 8 lakh penalty on Rathore in September 2020 in the matter of Malabar Trading Company.

Sebi imposed a fine of Rs 5 lakh on the brokerage house in August 2020 for flouting regulatory norms in the case of Spectacle Infotek, Goldstone Technologies, Gemstone Investments, LGS Global and Well Pack Papers and Containers.