Sebi announces reward mechanism for informants providing tips on defaulters

With an aim to recover fines from elusive offenders, capital markets regulator Sebi on Thursday introduced a reward system for up to Rs 20 lakh to informants for sharing information about the assets of defaulters.

The reward may be granted in two stages -- interim and final.

While the interim reward amount will not exceed two and a half per-cent of the reserve price of the asset regarding which tips was provided or Rs 5 lakh, whichever is less and the final reward amount will not exceed 10 per cent of the dues recovered or Rs 20 lakh, whichever is less.

Coming out with guidelines on grant of reward to an informant who provides credible information about the assets of the defaulter under recovery proceedings, Sebi said, "information and the identity provided by the informant or the reward paid to him shall be held in confidence."

As per Sebi, a person will be considered to be an informant eligible for reward if he or she furnishes original information in relation to the asset of a .