Sebi Attaches Bank, Demat Accounts in GDR Manipulation Case

New Delhi, Jan 3 (PTI) Markets regulator Sebi has ordered the attachment of bank accounts as well as shares and mutual fund holdings of Arun Panchariya to recover dues totalling over Rs 26 crore.

The penalty was imposed on Arun Panchariya for manipulation in the issuance of global depository receipts (GDRs) of Hiran Orgochem Ltd.

In an attachment notice on Monday, the markets watchdog has ordered attachment of bank as well as demat accounts of Panchariya to recover the pending dues.

The pending dues of Rs 26.25 crore comprise the initial penalty amount, interest and recovery cost, it added.

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

The regulator said there is sufficient reason to believe that the defaulter 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 its notice, Sebi asked all banks, depositories, and mutual funds not to allow any debit from the account. However, credits have been permitted.

In November last year, Sebi had issued a demand notice to Panchariya, asking him to pay about Rs 26.25 crore in the matter, and warned him of arrest and attachment of assets as well as his bank accounts if he fails to make the payment.

In July, Sebi imposed a penalty of Rs 25 crore on Panchariya and Rs 20 lakh on Mukesh Chauradiya for manipulation of GDR issuance in the case of Hiran Orgochem.

The direction came after the Sebi conducted an investigation to ascertain whether shares underlying GDRs of Hiran Orgochem were issued with proper consideration. The period under investigation was from April 2010 to May 2010.

Besides, Panchariya is responsible for the fraudulent scheme and arrangement for subscription of GDRs issued by several companies in which separate enforcement proceedings are going on.