The Securities and Exchange Board of India (SEBI) today directed banks and depositories to defreeze the accounts of Nithin Somani and Sonal Somani, in first such incident, as the market regulator recovered the amount from deafulters.

The (SEBI), on January 15, ordered attachment of bank and demat accounts of Somanis to recover penalties worth Rs 6 lakh imposed on them for violation of securities law.

This is the first case when SEBI has directed to defreeze the accounts of defaulters since the regulator began passing attachment orders and launching recovery proceedings in October 2013.

Since then, it has initiated at least 311 attachment proceedings in nearly 65 cases for recovery of investors' money worth nearly Rs 2,000 crore amassed through illicit schemes, as also of long-pending penalties for various market related defaults.

“The entire amount due...has been recovered from the defaulters,” the SEBI said today.

Consequently, the SEBI has directed all banks in the country and depositories to release the bank and demat accounts respectively of the defaulters.

The grant of additional powers, which included freezing of bank accounts, attachment of properties, conduct of search and seizure operations and launch of recovery proceedings, were given to SEBI through an ordinance.

While this ordinance has lapsed due to non-passage of a relevant Bill in the Parliament, actions taken by SEBI till January 15 would remain valid and the recovery proceedings will continue in these cases, according to officials.

The government would have to either pass the Bill in the next Parliament Session or promulgate the ordinance for third time at a later date for resumption of these powers to SEBI.

The ordinance to SEBI was first promulgated in July and for the second time in September last year.

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