Concerned over flow of black money into stock market, the Supreme Court-appointed SIT today asked regulator Sebi to compulsorily identify real owners of foreign funds coming through the controversial P-Note route and also prosecute those using equities for tax evasion.
In its third report on steps required to check the black money menace, the Special Investigation Team (SIT) said it is not enough for Sebi to ban individuals and companies from stock markets and the regulator needs to initiate prosecution proceedings and take all necessary “preventive and punitive” actions.
The SIT also questioned the current practice of P-Notes being transferable in nature and said “Sebi needs to examine if this provision of allowing transferring of P-Notes is in any way beneficial for easing foreign investment”.
P-Notes or Participatory Notes are typically Offshore Derivative Instruments issued abroad by Foreign Institutional Investors (FIIs) or their associates against the underlying Indian securities.