Lok Sabha Question No. 1020 (UNSTARRED), answered on 2019-02-08
Subject: SEBI Fine on Companies
Ministry: CORPORATE AFFAIRS
Asked by: LAXMI NARAYAN YADAV, RAM TAHAL CHOUDHARY

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

LOK SABHA UNSTARRED QUESTION NO. 1020 ANSWERED ON FRIDAY, THE 8th FEBRUARY, 2019/ MAGHA 19, 1940 (SAKA)

## SEBI FINE ON COMPANIES

## QUESTION

1020.  SHRI LAXMI NARAYAN YADAV: SHRI RAM TAHAL CHOUDHARY:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) the number of companies fined by Securities and Exchange Board of India (SEBI) during  the  last  three  years  along  with  the  reasons  for  which  these  companies  have been fined;
- (b) whether the said fines have been recovered; and
- (c) if not, the reasons therefor along with the efforts being made by the Government to recover the said fines and the outcomes thereof?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE                          (SHRI P. P. CHAUDHARY)

AND CORPORATE AFFAIRS

विधध और न्र्ार् एिं कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(a):- Securities and Exchange Board of India (SEBI) under the Department of Economic Affairs (Ministry of Finance) has stated on 04.02.2019 that as per SEBI Act, 1992 only the  courts  have  power  to  impose  fines.  SEBI  on  the  other  hand  has  power  to  levy penalty and not fine.  Details of adjudication proceedings disposed of during the last three financial years are as below:

| Financial year   |   Cases disposed |
|------------------|------------------|
| 2017-18          |              888 |
| 2016-17          |               83 |
| 2015-16          |              425 |

(श्री पी. पी. चौधरी)

The  reason  for  passing  of  adjudication  orders  against  entities,  imposing  penalty  on them is violation of various provisions of Securities Laws. (b):- The amount of penalty received during the last 3 financial years from the entities against whom adjudication orders have been passed are as below:

| Financial   | Amount received   |
|-------------|-------------------|
| year        |                   |
| 2017-18     | Rs. 30.87 crores  |
| 2016-17     | Rs. 35.33 crores  |
| 2015-16     | Rs. 58.80 crores  |

(c):-  In  certain  number  of  cases,  the  monetary  penalties  imposed  by  Adjudicating Officers have not been fully recovered because the entities have filed appeals before Hon'ble  Securities  Appellate  Tribunal  challenging  the  orders  imposing  monetary penalty passed by Adjudicating Officers. As regards other entities who have not paid the penalties imposed by Adjudicating Officers, SEBI has initiated recovery proceedings to recover the penalty amount. The amount recovered by way of recovery proceedings during the last 3 financial years is as below:

| Financial year   | Amount recovered through recovery proceedings   |
|------------------|-------------------------------------------------|
| 2017-18          | Rs. 16.2 crores                                 |
| 2016-17          | Rs. 8.4 crores                                  |
| 2015-16          | Rs. 11.4 crores                                 |

Further, for non-payment of penalty imposed by Adjudicating Officers, SEBI also  initiates  prosecution  under  Section  24(2)  of  SEBI  Act,  1992,  Section  20(2)  of Depositories Act, 1996 and / or Section 23M of Securities Contracts (Regulation) Act, 1956.

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