CS Executive · Capital Market and Securities Laws · Securities Market Intermediaries
SEBI attaches a bank account of Kaveri Merchant Bankers Ltd. under Section 11(4)(e) for alleged violations. Which statement correctly reflects the Act's conditions on this attachment?
The attachment can last up to ninety days unless the Special Court confirms it within that period, after which it continues during proceedings. The Act also limits attachment to property or accounts related to the proceeds actually involved in the violation.
- AAttachment may last up to ninety days, and SEBI must obtain confirmation from the Special Court within ninety days for it to continue; only proceeds actually involved in the violation may be attachedCorrect
- BAttachment is valid for one year without any confirmation
- CAttachment may cover all bank accounts of the intermediary regardless of the proceeds involved
- DConfirmation is needed from the Central Government within thirty days
Explanation
Section 11(4)(e) permits attachment for a period not exceeding ninety days. SEBI must obtain confirmation from the Special Court under section 26A within ninety days, after which the attachment continues during the proceedings. The second proviso restricts attachment to property or accounts related to proceeds actually involved in the violation, so the broad-attachment option is wrong.
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