New Delhi: These styles may have worked for ages, but announcing auctions by beating drums is grossly anachronistic according to SEBI. The market regulator feels that these methods have become a thing of the past and in this day and age, new ways can get better results.
Among the tasks of the Securities Exchange Board of India, there is the job of recovering fees by selling the property of defaulting or non-paying units. When these rights were reviewed recently, these old methods used for an auction came to light.
Officials said that the SEBI is consulting the finance ministry for preparing new rules for the recovery of penalties, fees, principal amounts and refunds.
The SEBI can appoint any person for the defaulter’s repayment of instalments and for seizing of his bank accounts, arresting or detaining the defaulter and managing the defaulter’s movable and immovable properties.
According to the official, SEBI said in a presentation to the government that some provisions of the Income Tax Act have become obsolete, such as drum play and public auction. In newspapers, new ways like advertising and e-auction can give better results, the communiqué said.
The SEBI has asked the government to make necessary amendments in the rules to implement the quick and effective methods of recovery.
Before confiscating or seizing any property under the existing provisions of the IT Act, it is necessary to announce the order of attachment or duplication by a means called Pukar (Hindi for calling out loud).
In addition, the order for seizure has to be displayed on the premises of the said property on a clearly and publicly visible place on the board of the tax collection office.
In response to the suggestion made by the SEBI in this regard, the ministry said that the provisions of recovery under the IT Act can be modified under the SEBI Act and the Union government has the right to do so. Therefore, the amendment should be based on the rules made by the Centre.