SEBI Moves to Seize Assets as ₹52.5 Lakh Debt Mounts Against Defaulter in Club Investigation

SEBI Moves to Seize Assets as ₹52.5 Lakh Debt Mounts Against Defaulter in Club Investigation​

SEBI Directs Banks and Depository Firms to Attach Accounts of Mr. Narayan Shivram Kotnis​

The Securities and Exchange Board of India (SEBI) has issued a stringent Notice of Attachment targeting the bank accounts and financial holdings of Mr. Narayan Shivram Kotnis. This action was taken as part of recovery proceedings related to the investigation into Royal Twinkle Star Club Private Limited.

The Recovery Division, SEBI, issued the notice on August 24, 2026. The attachment order is backed by a Recovery Certificate No. 8927 of 2025, dated October 16, 2025. This certificate details the outstanding dues owed by Mr. Kotnis (PAN: ABIPK5022D).

Breakdown of Dues and Penalties​

The total amount due against the Defaulter currently stands at ₹52,51,000/- (Rupees Fifty-Two Lakhs Fifty-One Thousand Only). These dues are calculated based on a Penalty imposed by the Adjudicating Officer. The penalty alone amounts to ₹50,00,000/- and includes accrued interest and recovery costs.

The debt arose from an investigation in the matter of Royal Twinkle Star Club Private Limited, where the Adjudicating Officer issued Order No. Order/AK/DS/2025-26/31472-31476 on June 18, 2025.

Immediate Action: Banks Directed to Freeze Accounts​

In light of zero payments received from Mr. Kotnis, SEBI has exercised its powers to attach all financial accounts held by him across Indian banks. The notice instructs the Principal Officer/Chairman & Managing Director / CEO of all banks in India regarding this matter.

The directive orders the attachment of all accounts and lockers held by the Defaulter, whether singly or jointly with any other person. Furthermore, it includes all amounts due or which may become due to Mr. Kotnis.

Banks are explicitly ordered that no debit shall be made from these attached accounts until further directions are issued by SEBI. However, any credits flowing into these accounts may still be allowed.

Demat and Mutual Fund Folios Attached as Well​

Complementing the banking attachment, a separate notice has been issued to Central Depository Service (CDSL) and all Mutual Funds in India. This action targets the financial instruments held by Mr. Kotnis in his Demat accounts and Mutual Fund folios.

The objective of attaching these assets is to ensure realization of the outstanding amount as per Recovery Certificate No. 8927 of 2025. As with banking, no debit shall be made against these attached accounts or folios until further orders from SEBI are received. Credits into these accounts may still be permitted.

Directives and Next Steps for Financial Institutions​

SEBI has mandated specific actions for the recipient institutions (banks and depositories) to fulfill the recovery process. Within 15 days of receiving the notice, the institutions must provide detailed information to the undersigned SEBI representative.

Required details include a complete list of all accounts or folios held by Mr. Kotnis. Institutions must also furnish copies of account statements for the last one year and confirm the attachment status of all affected accounts and lockers.

The notices serve as clear directives to both the Defaulter and the financial sector, indicating that failure by the institutions to comply will be assumed to signify no active accounts or balances held by Mr. Kotnis with them.