Description

SEBI has issued a Notice of Demand for Rs. 5,21,000 against Makwana Bharat S. HUF (PAN: AALHM4561P) under Recovery Certificate No. 9093 of 2026, arising from a penalty imposed for dealing in Illiquid Stock Options on BSE.

Summary

SEBI has issued a Notice of Demand dated 29 April 2026 under Recovery Certificate No. 9093 of 2026 against Makwana Bharat S. HUF (PAN: AALHM4561P), based in Thangadh, Gujarat. The demand is pursuant to a penalty of Rs. 5,00,000 imposed by the Adjudicating Officer vide Order No. Order/JS/DP/2025-26/31970 dated 16 January 2026, for dealing in Illiquid Stock Options on BSE. The total amount due, inclusive of interest and recovery costs, is Rs. 5,21,000.

Key Points

  • Recovery Certificate No. 9093 of 2026 issued under Section 28A of the SEBI Act, 1992 read with Section 222 of the Income Tax Act, 1961
  • Penalty of Rs. 5,00,000 imposed on Makwana Bharat S. HUF for dealing in Illiquid Stock Options on BSE
  • Interest accrued at 1% per month from January 2026 to April 2026 amounting to Rs. 20,000
  • Recovery cost of Rs. 1,000 added; total demand is Rs. 5,21,000
  • Payment must be made within 15 days of receipt of the notice via EFT/NEFT/RTGS to SEBI’s designated ICICI Bank account (A/c No. SEBIRRDPEN9093, IFSC: ICIC0000106) or through the SEBI SI Portal
  • Non-compliance may trigger attachment/sale of movable and immovable property, bank account attachment, arrest and detention, or appointment of a receiver

Regulatory Changes

No new regulatory changes are introduced. This notice is an enforcement action under existing provisions of Section 28A of the SEBI Act, 1992 read with Sections 220–227, 228A, 229, and 232 of the Income Tax Act, 1961 and the Second Schedule thereto.

Compliance Requirements

  • Makwana Bharat S. HUF must pay Rs. 5,21,000 within 15 days of receiving this notice
  • Payment must be made via direct credit through EFT/NEFT/RTGS to the designated SEBI account or through the SEBI online recovery payment portal (https://siportal.sebi.gov.in)
  • E-payment confirmation (including case name, RC number, payee name, date, amount, transaction number, and bank details) must be sent to akashb@sebi.gov.in and recoveryho1@sebi.gov.in
  • The entity must not mortgage, charge, lease, or transfer any property without the Recovery Officer’s permission; any such transfer will be deemed void
  • Transfers of property or money to spouse, minor child, son’s wife, or son’s minor child without adequate consideration on or after 16 January 2026 will be treated as the defaulter’s property for recovery purposes

Important Dates

  • 16 January 2026: Date of original Adjudicating Officer order (Order No. Order/JS/DP/2025-26/31970) imposing the Rs. 5,00,000 penalty
  • January 2026 – April 2026: Period for which interest at 1% per month has been calculated
  • 29 April 2026: Date of this Notice of Demand
  • Within 15 days of receipt: Deadline for payment of the total demand of Rs. 5,21,000

Impact Assessment

This is a targeted enforcement action against a single HUF entity and has no direct market-wide or systemic impact. It is part of SEBI’s ongoing enforcement initiative against entities found to have dealt in illiquid stock options on BSE, which has been a focus area for SEBI in curbing market manipulation and price rigging. The relatively modest penalty amount (Rs. 5 lakh) and individual nature of the action limit its broader significance. Market participants dealing in options on BSE should note that SEBI continues to actively pursue recovery of penalties in such matters, including through coercive measures like property attachment and arrest.

Impact Justification

This is an individual enforcement/recovery action against a single HUF entity for dealing in illiquid stock options. It has no broad market or systemic impact, but reflects SEBI's continued enforcement against manipulation of illiquid derivatives on BSE.