Introduction: Explore SEBI’s press release (No.17/2023) addressing inaccuracies in news coverage of its Annual Report. The clarification provides insights into ‘Difficult To Recover’ (DTR) cases, revealing their composition and recovery status.
Analysis: SEBI’s press release corrects media reports that wrongly interpreted data from the Annual Report of 2022-23. The release details the composition of 692 ‘Difficult To Recover’ cases as of March 31, 2023, with an outstanding amount of Rs.73,287.1 crore. The categories of cases are delineated, including those pending before State PID Courts, NCLT, NCLAT, Court-appointed Committees, and more.
A significant portion of the outstanding amount is attributed to cases involving parallel proceedings and Court-appointed Committees, constituting 96.7% of the total outstanding amount. These cases are historical, pertaining to violations committed over a decade ago.
Additionally, the release highlights that only five out of 120 untraceable entities are companies, with the rest being individuals. The total amount involved with these untraceable entities is a mere 0.02% of the outstanding recovery amount. Moreover, the majority of these untraceable cases are historical, with violations dating back over a decade.
SEBI emphasizes its commitment to transparency by sharing ‘Difficult To Recover’ case data through its Annual Reports since 2021-22, aligning with regulatory guidelines.
Conclusion: The SEBI press release clarifies misconceptions surrounding its Annual Report data. By shedding light on the composition and recovery status of ‘Difficult To Recover’ cases, SEBI reinforces its commitment to transparency. The release underscores the historical nature of these cases and their minimal impact on the total outstanding amount. This communication exemplifies SEBI’s efforts to uphold accountability and foster trust within the financial regulatory landscape.
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Securities and Exchange Board of India
Press Release No.17/2023
This is with reference to certain news items quoting the content of SEBI Annual Report.
In this regard, it is clarified that the news items have wrongly interpreted the data published in Annual Report of 2022-23.
In this context, the factual position is as follows –
1. As on March 31, 2023, there were 692 cases which are identified as ‘Difficult To Recover (DTR)’ with a total outstanding amount of Rs.73,287.1 crore as detailed in the table below:
Composition of DTR Cases
|
Category |
No. of Cases | Amount (in Rs. crore) |
| Parallel proceedings pending before State PID Courts, NCLT and NCLAT | 30 | 12,162.3 |
| Pending before Court appointed Committees | 56 | 58,756.5 |
| Death (no assets left behind) | 8 | 0.2 |
| Defaulter is alive but has no attachable assets | 83 | 6.4 |
| Defunct Company | 341 | 1,939.4 |
| Untraceable | 120 | 17.8 |
| Stay/Moratorium by Courts | 47 | 403.6 |
| Under Liquidation | 7 | 0.9 |
| Total | 692 | 73,287.1 |
2. Out of 692 cases, 86 are pending on account of parallel proceedings before State PID courts, NCLT, NCLAT and also before Court appointed Committees, with recovery dues amounting to Rs.12,162.3 crore and 58,756.5 crore, respectively. Together, the abovementioned two categories constitute 96.7% of the total amount outstanding to be recovered. All these cases are old cases pertaining to violations that were committed over a decade ago.
3. With regard to the 120 entities listed as untraceable, it may be noted that, of these, only five are companies and all others are individuals. The amount involved with regard to these 120 entities is Rs.17.82 crore, which is 0.02 per cent of the total outstanding amount to be recovered. Moreover, out of 120 entities, 116 cases are old (97%) and the violation period dates back to over a decade ago.
SEBI has been disseminating data on composition of Difficult To Recover cases from 2021-22 onwards through its Annual Report in order to enhance transparency of its enforcement proceedings and in compliance with SEBI (Annual Report) Rules, 2021.
Mumbai
August 10, 2023
