Rs 20 Lakh For Giving Tips On Defaulters; Sebi Brings Reward Mechanism, Check Details Here

With an aim to recover fines from elusive offenders, capital markets regulator Sebi on Thursday introduced a reward system for up to Rs 20 lakh to informants for sharing information about the assets of defaulters.

The reward may be granted in two stages — interim and final.

While the interim reward amount will not exceed two and a half per-cent of the reserve price of the asset regarding which tips was provided or Rs 5 lakh, whichever is less and the final reward amount will not exceed 10 per cent of the dues recovered or Rs 20 lakh, whichever is less.

Coming out with guidelines on grant of reward to an informant who provides credible information about the assets of the defaulter under recovery proceedings, Sebi said, “information and the identity provided by the informant or the reward paid to him shall be held in confidence.” As per Sebi, a person will be considered to be an informant eligible for reward if he or she furnishes original information in relation to the asset of a defaulter concerning the dues which are certified as ‘Difficult to Recover’.

The difficult-to-recover dues are the ones which could not be recovered even after exhausting all the modes of recovery.

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Also, the regulator issued a list of 515 defaulters, where information can be provided by any informant.

In addition, for the purpose of recommending the eligibility of reward, Sebi will set-up an informant reward committee comprising the chief general manager of Recovery and Refund Department, the concerned recovery officer having jurisdiction in the matter, another recovery officer nominated by the chief general manager and an officer in the grade of deputy general manager or higher, of the Office of Investor Assistance and Education nominated by the chief general manager in charge of Investor Protection and Education Fund (IPEF).

The informant reward committee will give its recommendations to the competent authority on the matters pertaining to eligibility of informants for reward and determination of the amount of reward payable to informants.

Sebi said that the amount of reward granted to the informant will be paid from the Investor Protection and Education Fund.

The new guidelines have become effective from March 8, the Securities and Exchange Board of India (Sebi) said.

According to Sebi’s annual report for 2021-22, the markets regulator segregated dues to the tune of Rs 67,228 crore under “difficult to recover” (DTR) category at the end of March 2022.

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)