MUMBAI: The Securities and Exchange Board (Sebi) said that is facing difficulties in recovering the dues to the tune of Rs 76,293 crore as of March 2024, which is more than four per cent from the previous year. But this is a major improvement over FY23 when the pending dues were Rs 1.02 trillion.
According to the market regulator’s annual report for FY24, of the 3,871 recovery notices issued by it in various cases, as much as 807 are certified as difficult to recover. Of these, as much as 78 per cent are due to cases pending before court-appointed committees.
The number of pending appeals in the Securities Appellate Tribunal has also risen from 749 to 849 in FY24, says the annual report, pegging the amount to be recovered standing at a staggering Rs 76,293 crore. However, the report does not mention the amount it has recovered through the past fiscal year.
Even though the number of pending cases increased, the number of new appeals filed has fallen.
In FY23, Sebi’s recovery fell sharply to just Rs 6,031 crore while it had pending demands worth Rs 1.02 trillion, according to the FY23 annual report. In FY22, the regulator had recovered from erring market participants as much as Rs 15,756 crore, which was 61.72 percent more than it did in FY23.
Of the total dues pending as much as Rs 70,482.62 crore or 68.7 per cent were under parallel proceedings before various courts and court-appointed committees.
Of the total dues, as much as Rs 63,206 crore or 61.7 per cent pertained to CIS/DPI (collective investment scheme/deemed public issues) by PACL and Sahara India Commercial Corporation. These numbers stands the same in FY24 as well.
Sebi’s default to recover (DTR) had shot up to Rs 73,287 crore in FY23 from Rs 67,228 crore in FY22. DTR dues are the dues that could not be recovered even after exhausting all the modes of recovery. They include cases where accused persons or entities have died, have no attachable properties, are untraceable, and so on.
Meanwhile, the total pending cases in the Supreme Court related to Sebi or SAT (Securities Appellate Tribunal) have grown from 440 in FY23 to 519 in FY24, and stand at 1,162 cases in the high courts. Overall, over 4,000 cases are pending before various higher legal fora.
The annual report mentions the key areas of work for FY25 including further reducing the minimum investment for mutual funds, faster processing of rights issues, and fostering greater innovations.
'To promote low-ticket systematic investment plans (SIPs) and also to ensure its viability, Sebi and the mutual funds lobby Amfi are in consultation with the industry stakeholders to reduce the overall cost associated with the product to aid financial inclusion,' says the report.
The regulator has also formed an advisory committee to focus on capital formation through real estate investment trusts (Reits) and infrastructure investment trusts (Invits) along with municipal bonds.
Sebi said it will also review the existing rights issue framework to rationalise the disclosure requirements and reduce its timeline.
It is also working on a data benchmarking institution (DBI) to provide a central repository of standardised and comparable data related to various asset classes to help investors analyse.
Among other key areas of work are easing regulations and compliance burden, better corporate governance, steps to deepen the corporate bond market, and a framework to deal with malpractices by people using new-age technology to evade laws.
"We cannot predict how macro and micro variables will impact investment behaviour, investment avenues, or portfolio companies. However, what we can do, and we are committed to doing, is to help the securities market and its numerous engines to be future-ready, to help ensure the markets be agile and capable of dealing with changes in the future, whatever those changes may be," said chairperson Madhabi Puri Buch was quoted as saying the annual report.
Sebi said in FY23, it had initiated adjudication proceedings in 6,850 cases, while it disposed of 11,824 cases (which include the cases concerning the trading of illiquid stock options at BSE). At the end of March 31, 2023, as many as 1,950 cases were pending.