Sebi orders a/c attachment to recover Rs 1520 cr from CIS firm

Market regulator has taken action against a number of unauthorised CIS entities from West Bengal including Saradha, Rose Valley

Market regulator Sebi today ordered attachment of over 50 bank accounts of West Bengal-based MPS Greenery Developers Ltd for recovery of Rs 1,520 crore, along with applicable returns, collected from investors through illegal collective investment schemes.

This is the first direct attachment order issued by the Sebi in a case involving an unauthorised CIS scheme, which has emerged as a major route for illegal raising of public funds.

Sebi has taken action against a number of unauthorised CIS entities from West Bengal including Saradha, Rose Valley and Sumangal group entities.

Passing the order, Sebi said MPS Greenery was ordered in December last year to refund Rs 1,520 crore along with return to investors, but it failed to do so and therefore the regulator was now passing an attachment order for recovery of this money.

Sebi has asked eight banks, including both public and private sector entities, to attach at least 51 accounts held by MPS Greenery with them, as also other accounts that the defaulter entity may have with those banks.

Sebi also ordered attachment of "all other accounts by whatever name called of the defaulter, either singly or jointly with any other persons".

It is further asked the banks not to allow any debit in these accounts until further orders. However, the credits, if any into the account may be allowed, the Sebi said.

The move is part of Sebi's efforts to recover a total fine of about Rs 1,520 crore "along with interest, all costs, charges and expenses in respect of all proceeding for recovering the said sum against defaulter and the same is due from it."

The government recently granted Sebi powers to attach 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.

Sebi has also asked banks to provide details of all accounts, including lockers held by MPS Greenery, copy of account statements of the past one year, confirmation of attachment of the said accounts.