SEBI Issues Formal Demand Notice to HUF Traded Illiquid Stock Options at BSE, Citing Non-Compliance

SEBI Issues Formal Demand Notice to HUF Traded Illiquid Stock Options at BSE, Citing Non-Compliance​

The Securities and Exchange Board of India (SEBI) has issued a formal Notice of Demand against Sanjay V Mohare HUF concerning alleged non-compliance related to the dealing in illiquid stock options traded on the Bombay Stock Exchange (BSE). The notice demands a specific sum for penalties, interest, and recovery costs.

The regulatory action highlights SEBI's continuous oversight into market participants involved in structured derivatives trading. The notice was officially released on June 9, 2026, under Certificate No. 9146 of 2026.

Details of the Financial Demand​

SEBI certified that a total amount of ₹6,37,000.00/- is due from Sanjay V Mohare HUF (PAN: AAGHS4356D). This sum includes penalties, accruing interest, and recovery expenses related to the matter under investigation.

The detailed breakdown of the dues is as follows:

• Penalty imposed by the AO vide Order/JS/DP/2025-26/31995 dated January 22, 2026: ₹6,00,000.00/-
• Interest calculated from January, 2026 to June, 2026 @ 1% p.m.: ₹36,000.00/-
• Recovery cost: ₹1,000.00/-

The notice directs the entity to repay the total outstanding amount of ₹6,37,000.00 within fifteen days of receiving the document.

Recovery Proceedings and Non-Compliance Risks​

The Notice of Demand is drawn under Section 28A of the Securities and Exchange Board of India Act, 1992 read with Section 222 of the Income Tax Act, 1961. SEBI has clearly outlined various methods by which it will recover the money in case of non-payment.

These recovery modes include:

• Attachment and sale of movable property.
• Attachment of bank accounts.
• Attachment and sale of immovable property.
• Arrest and detention in prison.

The comprehensive nature of these actions underscores the regulatory seriousness attached to the findings regarding the illiquid stock options dealings at BSE.

Consequences of Non-Payment and Asset Transfers​

SEBI has also issued an advisory note advising the HUF that, upon service of this notice, they are not competent with the permission of the Recovery Officer. Any such transfer of property or monies to a spouse or minor child is deemed void under Rule 16 of the Second Schedule to the Income-tax Act, 1961 read with Section 28A of the SEBI Act.

The recovery process mandates strict adherence to payment protocols. All confirmation of e-payment must be forwarded in the specified format to The Recovery Officer, as detailed on the notice. The HUF is strongly advised to maintain meticulous records of all payments made.

Next Steps for Stakeholders and Regulatory Oversight​

The Notice specifies that Kirtikumar Jadhav, General Manager & Recovery Officer at SEBI, is overseeing this matter. Companies like CDSL and NSDL have been copied on the notice.

A specific request has been made to provide the holding details of Sanjay V Mohare HUF immediately by return email. This information must be intimated to the Recovery Officer should any sale or redemption request be received from the defaulter subsequent to the date of this Notice of Demand.