SAT Asks NSE To Decide By Friday In Karvy’s Licence Suspension Matter
The Securities Appellate Tribunal has asked the National Stock Exchange to decide on suspension of Karvy Stock Broking Ltd.’s trading licence by Friday.
Karvy Stock Broking had allegedly misused securities of over 95,000 clients which it was holding on behalf of the clients to raise over Rs 600 crore in loans from various lenders.
In an order passed on Tuesday, the tribunal said that Karvy Stock Broking would be at liberty to file an appeal under NSE rules.
"In case, if such an appeal is filed, appellant (Karvy Stock Broking) shall be heard as expeditiously as possible and in any event shall be decided by December 6, 2019.
"In case the relevant authority wouldn't be able to decide the appeal within the period, the decision on the temporary stay to the impugned order may be taken by the relevant authority on or before December 6, 2019," it added.
In its Nov. 22 report to Securities and Exchange Board of India, NSE said Karvy Stock Broking was misusing clients' securities. Karvy Stock Broking used its demat account to transfer securities worth Rs 2,300 crore of more than 95,000 clients by misusing the power of attorney provided by the clients.
The SAT order came on a plea from affected lenders—HDFC Bank Ltd. , ICICI Bank Ltd., Indusind Bank Ltd. and Bajaj Finance Ltd.—which challenged NSDL's decision on Monday to transfer shares from Karvy Stock Broking back to 83,000 clients. This has helped almost 90 percent of the affected clients recover their investments.