Karvy Stock Broking Challenges Securities & Exchange Board Of India Order Before The Securities Appellate Tribunal
[ By Bobby Anthony ]Karvy Stock Broking has moved the Securities Appellate Tribunal (SAT) through its law firm Vishesha Law Services, seeking relief to allow it to tender securities for settlement.Earlier, a Securities & Exchange Board of India (SEBI) order had restrained the brokerage from using the Power of Attorney (PoA) of its clients after client defaults worth Rs2,000 crore, due to which...
Karvy Stock Broking has moved the Securities Appellate Tribunal (SAT) through its law firm Vishesha Law Services, seeking relief to allow it to tender securities for settlement.
Earlier, a Securities & Exchange Board of India (SEBI) order had restrained the brokerage from using the Power of Attorney (PoA) of its clients after client defaults worth Rs2,000 crore, due to which it is unable to finish the settlement process of the shares.
The SEBI order has banned Karvy Stock Broking from taking on new clients as well as executing trades for existing customers.
The SEBI passed its order after an investigation by the National Stock Exchange (NSE) allegedly found that Karvy had sold clients’ stocks pledged with it through associated entities and diverted the funds.
The SEBI had also directed depositories not to act upon any instruction given by Karvy Stock Broking in pursuance of the PoA given to it by its clients with immediate effect.
Depositories were also ordered not to allow transfer of securities from the depository participant account named Karvy Stock Broking with immediate effect.
The capital market regulator stated that transfer of securities should be permitted only to the respective beneficial owner who has paid in full against these securities under the supervision of NSE.