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Sebi plans revised norms for recovery of investors' money

Press Trust of India  |  New Delhi 

plans to put in place revised norms for recovering investors' in cases of illegal collective schemes, wherein a registered professional will be appointed as to undertake sale of assets.

A senior said the regulator is looking to revise the procedures to be followed after passing of orders in cases related to unregistered collective schemes.

In case an entity is not traceable or is not complying with directions, the can appoint an for the purpose of selling the properties attached.

According to the official, only an entity registered with the IBBI as resolution professional would be considered eligible for appointment as

The and Bankruptcy Board of India (IBBI) is implementing the Insolvency and Bankruptcy Code.

Before appointment as administrator, such an entity should provide an undertaking with that it does not have any "conflict of interest with the unregistered collective scheme entity, its directors, promoters and its group entities," the said.

According to the official, the proposal is likely to be taken up during Sebi's board meeting scheduled for June 21.

The expenses pertaining to the administrator would be borne by the entity or come from the sale proceeds of the entity's assets.

The said the administrator can appoint an to verify the details of raised, including payment already made to investors.

The proposed norms would also be applicable in instances of refunding investors in deemed public issues and cases where a particular entity has failed to comply with directions to disgorge ill-gotten gains.

In case the administrator is not able to raise the entire dues by sale of the entity's assets, then repayment would be done on a pro-rata basis.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 17:30 IST