Sebi eases restrictions on 19 persons facing money laundering charges


Business, Market

Entities given certain relaxations including permission to deal in govt securities and invest in ETF.

Sebi is market regulator.

New Delhi: Markets regulator Sebi has relaxed restrictions on 19 entities against whom it had taken action in case of alleged misuse of the stock market platform for tax evasion and suspected money-laundering activities.

The entities, which were barred from the securities market, have now been given certain relaxations, including permission to deal in government securities and invest in ETF (exchange-traded funds).

Besides, they can enter into delivery-based transactions in cash segment in NSE Nifty 500 index as well as S&P BSE 500 shares, and subscribe to mutual funds. Among others, these entities can tender shares lying in their demat account in any open offer/delisting under the relevant Sebi regulations.

Sebi, in June 2015, had restrained 254 entities including Eco Friendly Food Processing Park, Esteem Bio Organic Food Processing, Channel Nine Entertainment and HPC Biosciences from the capital market for making illegal gains through suspected money laundering and tax evasion activities.

Out of them, 19 individuals have been given the relaxations now. In an order dated June 15, Sebi Whole Time Member G Mahalingam has "rejected the prayers of such noticees (19 entities) for setting aside the interim order for complete removal of restraints imposed by it". However, he has given
certain relaxation to 19 persons.

As per the order, the entities for whom relaxations have been extended can sell the securities lying in their demat accounts. This will exclude shares of the companies which are suspended from trading by stock exchanges concerned. Besides, sale proceeds lying in the escrow account can be used for
certain purposes.

Sebi said, "up to 25 per cent of the value of the portfolio as on the date of the interim order or the amount in excess of the profit made/loss incurred or value of shares purchased to give exit, whichever is higher, may be utilised for business purposes and/or for meeting any other exigencies or addressing liquidity problems etc".