Karvy Case: SAT Refuses Relief To HDFC Bank, ICICI Bank, IndusInd Bank
Brokers watch their screens during trading hours inside a dealing room at a bank in Mumbai, India. (Photographer: Abhijit Bhatlekar/Bloomberg News)

Karvy Case: SAT Refuses Relief To HDFC Bank, ICICI Bank, IndusInd Bank

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The Securities Appellate Tribunal on Wednesday refused any immediate relief to top lenders who had petitioned against the transfer of securities held with Karvy Stock Broking Ltd. back to the clients.

ICICI Bank Ltd., HDFC Bank Ltd. and IndusInd Bank Ltd. had contended that many of these securities have been used to borrow money from them and had asked the tribunal to either get back the securities to them or freeze them in an escrow account.

Karvy Stock Broking allegedly 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 them. About 83,000 clients got back their securities on Monday, following which Bajaj Finance Ltd. moved SAT and secured interim relief on further transfers.

The private banks joined the petition on Tuesday and there was a lengthy hearing.

On Wednesday, SAT said no further relief can be granted to the lenders beyond the order in the Bajaj Finance plea. They can now approach Securities and Exchange Board of India by Dec. 6 with a fresh plea. A whole-time member of the regulator would give a personal hearing to the aggrieved parties and pass an order by Dec. 12.

On Monday, BSE and NSE suspended Karvy Stock Broking’s trading licence. On Nov. 22, Securities and Exchange Board of India barred Karvy Stock Broking from taking new clients due to the alleged misuse of clients’ securities.

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