Securities and Exchange Board of India has restrained the brokerage from using the clients' Power of Attorney (PoA) because of which they are unable to finish the settlement process of the shares , said a person close to the development. The tribunal has posted the matter for hearing on Friday. Law firm Vishesha Law Services is representing Karvy Stock Broking before SAT. Karvy did not respond to an email query on the matter
Last week , Sebi banned Karvy Stock Broking for client defaults worth Rs2,000 crore. It has been banned from taking on new clients and executing trades for existing customers.
This follows an investigation by the National Stock Exchange (NSE) which allegedly found that Karvy had sold client stocks pledged with it through associated entities and diverted the funds.
Sebi had directed depositories not to act upon any instruction given by Karvy Stock Broking in pursuance of Power of Attorney given to the brokerage house by its clients with immediate effect.It also asked depositories to not allow transfer of securities from depository participant account named Karvy Stock Broking with immediate effect.
The regulator said 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.
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6 Comments on this Story
Prakash Mohapatra437 days ago
This is India, the chairman and managing director of Karvy know that no strict action to be initiated against them as this is India. Otherwise this type of diverting of thousands crores of customers money on personal interest and no arrest action tiidate proofs the regulatory and judicial system of country.This type of incidents without arrest actin will promote such type of incidents in future.
Ramesh Natarajan454 days ago
Why no one in Karvy including the MD and CFO have not been arrested. Why heads are not rolling in SEBI for being unable to smell this for such a long time. There is someing more to it than what has been out in the media.
Kamal Gupta455 days ago
Corruption is everywhere.Everything will settle down only within a few days or months. The same thing will happen again. We the investors are prepared for thah.