SAT Allows Axis Bank To Sell Securities In Modex International Matter
Axis Bank had appealed against an order by the NSE in the Modex International case.
The Securities Appellate Tribunal has allowed Axis Bank Ltd. to sell certain securities to recover dues worth up to Rs 21.61 crore in the Modex International Securities Ltd. case.
These securities have to be sold within one month and after recovery of the dues, "surplus, if any, would be returned to the clients immediately thereafter", it said in an order dated July 3.
Axis Bank, in its capacity as a professional clearing member, had appealed against an order by the National Stock Exchange in the Modex International case. The bourse had directed Axis Bank to release certain securities that were owned by the bank since those securities had been legally transferred to its account.
The bank had cleared the trading of Modex International.
In its plea filed in June, Axis Bank said it had submitted a list of securities to the NSE in January 2020 stating that those securities are given by clients of Modex and have dues pending in favour of the company. Therefore, Axis Bank sought to liquidate certain shares to recover its entitled amount of Rs 21.62 crore.
Axis Bank had moved the tribunal seeking a stay on the NSE order. The bank had also sought permission to dispose Rs 21.62 crore worth securities and then release the remaining securities given by Modex to it.
In this regard, the tribunal passed an interim order in June and directed Axis Bank, Modex International Securities, SEBI and others to appear before the NSE on June 24.
Citing the minutes of a meeting held on June 29, the tribunal said it was decided that the bank may appropriate the securities related to PRO as well as debit clients to the extent to their debit balance to recover their dues towards obligation.
In addition, securities required to be transferred to zero/credit and debit clients in excess of their debits balance have to be released by the lender within one week, the tribunal said.