Sebi orders attachment of personal assets of Shree Ramkrishna Electro Controls' former MD

15 Jul 2022 , 01:54 PM

In the case of Shree Ramkrishna Electro Controls Ltd., Sebi has mandated the attachment of a person’s bank accounts as well as shares and mutual fund holdings in order to collect around Rs18 crore.

According to a Thursday attachment notice from Sebi, Chandrakant Bhargav Gole has been ordered to pay back the firm the sum of Rs5.74 crore plus 15% interest per year, or Rs12.53 crore, that was obtained through the sale of redeemable cumulative preference shares (RCPS) to investors.

During the pertinent time, Gole served as managing director of Shree Ramkrishna Electro Controls Ltd (SRECL). Sebi requested in its notification that banks, depositories, and mutual funds not permit any debits from Gole’s accounts. Credits have been allowed, though.

The markets watchdog has also instructed all banks to seize all of the defaulter’s accounts, including lockers. The realization of the amount due under the certificate would, as a result, be delayed or blocked, according to Sebi. “There is sufficient reason to suspect that the defaulter may withdraw the funds or dispose of the securities in the accounts held with you,” it stated.

“It is required to attach all of the defaulter’s assets, including bank accounts, Demat accounts, and mutual fund investments to prevent any alienation of the same in order to defend the interest of investors,” it continued.

The regulator had instructed Gole to reimburse Rs5.74 crore that had been received from investors in December 2021, plus interest at a rate of 15% per year up till the investors’ actual payment date.

In addition, Gole was prohibited by Sebi from engaging in the securities market and from working with any publicly traded company for a period of four years following the completion of investor reimbursements.

The regulator claims that SRECL issued RCPS to numerous investors between 2004 and 2010 and raised Rs5.74 crore from them, in violation of the DIP (Disclosure and Investor Protection) rules and public issue standards.