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Transgene Biotek has disclosed that SEBI's Recovery Officer has initiated recovery proceedings against the company for failing to pay a penalty of Rs.38 lakhs arising from a SEBI Adjudication order dated 27 June 2022. A Prohibitory Order has been issued restraining the company from disposing of or transferring any immovable or movable properties and freezing its bank accounts. The company notes that it had already filed an appeal against the original penalty order with the Securities Appellate Tribunal (SAT) in Mumbai on 7 October 2022, which remains pending. As a direct consequence of the asset freeze, the company states that salary payments and business operations have been paralyzed, bringing activities to a standstill.
This is a significant negative development for shareholders — the company faces operational paralysis due to frozen bank accounts, an outstanding SEBI penalty, and unresolved litigation. The stock is likely to face pressure as operational disruption and regulatory overhang continue until the SAT appeal is resolved or the penalty is settled.