SEBI has decided to appoint administrators registered as insolvency professionals (IPs) to oversee distribution of money to investors. If the administrators appointed by SEBI refuse to work during the pendancy of the assignment, it will recommend sustainable action against them, the regulator said in a recent circular.
SEBI is sitting on a huge pile of cash and property worth thousands of crores which it has managed to recover from fraudulent collective investment schemes and other such unregistered schemes. Though recovery of money from companies such as Sahara and PACL has led to accumulation of huge amounts of cash with SEBI, its distribution to investors has been an uphill task, sources said.
On April 2, SEBI issued a circular stating that the board after attachment of the properties of the defaulters may appoint an administrator who is a person registered with the Insolvency and Bankruptcy Board of India as an insolvency professional.
Interestingly, SEBI said, an administrator, who is selected from a panel of IPs, shall not withdraw his consent to act as an administrator or refuse to act as an administrator, if appointed by the board under the Administrator Regulations. He or she cannot surrender his/her registration to the IBBI Board or membership to the insolvency professional agency (IPA) during the pendancy of the assignment. In case of such withdrawal or refusal, the matter will be referred to the IBBI for suitable action, SEBI said.
Source: Business Line, April 4,2019