Get rewards of up to Rs 20 lakh from Sebi for information, list of 515 defaulters released

Indian markets regulator Sebi has brought in a new rewards system in order to incentivise the public for information on defaulters. As per the new plan of the Securities and Exchange Board of India, informants sharing tips regarding assets of defaulters will get monetary rewards of up to Rs 20 lakh.

The system intends to recover fines from elusive offenders. Sebi will compensate informants in two stages with an interim reward and a final reward. As per the details shared, informants will receive interim rewards with an amount not exceeding 2.5 percent of an asset’s reserve price or Rs 5 lakh, whichever amount is lower.

The final reward will be an amount not exceeding 10 percent of the asset or Rs 20 lakh, whichever is lower. Sebi has issued guidelines on the new reward system including how the money will be paid for credible information on the assets of a defaulter. The identity or the informant and the reward they receive “shall be held in confidence”, Sebi said.

To be considered an informant eligible for reward, a person needs to share original information regarding a defaulter’s asset concerning dues certified as ‘Difficult to Recover’. Meanwhile, Sebi also released a list of 515 defaulters for which people can provide information. The rewards will be paid via the Investor Protection and Education Fund.

An informant reward committee will be set up by Sebi. It will comprise chief general manager of Recovery and Refund Department, 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). Sebi’s new guidelines came into effect from Wednesday, March 8, 2023. 

(Inputs from PTI)