Karvy case: Sat halts any transfer of shopper securities when lenders challenge SEBI call
The banks have sought-after immediate phase change of the securities transferred to clients’ accounts. HDFC Bank has Lententide Rs four hundred large integer to Karvy supported these pledged shares.
The Securities proceeding assembly (SAT) has taught National Securities repository (NSDL) to halt transfer of the balance capitalist securities that Karvy Stock Broking had pledged with lenders.
The call came when Bajaj Finance challenged SEBI’s decision to come back to Karvy’s shoppers the securities that the broking house had illicitly pledged to lift cash for itself.
The assembly any directed SEBI to listen to out the lender’s considerations by Dec four ANd pass an order by Dec ten.
NSDL on Dec two transferred securities value Rs two,013.77 large integer to over eighty three,000 shoppers of the affected ninety,000 Karvy investors. Most of the remaining accounts area unit under consideration with Karvy Stock Broking, so that they might get their money/securities when clearing dues with Karvy.
This Sat ruling currently puts an issue mark on the receipt of securities for these investors.
“Bajaj Finance had Lententide Rs a hundred large integer when SEBI’s Gregorian calendar month circular mandated segregating shopper and proprietary accounts. This circular clearly states that monetary establishments cannot grant loans against shopper pledged shares,” a supply told Moneycontrol.
This could indicate that Bajaj Finance doesn’t have a powerful claim within the case.
Another supply declared that Sat doesn’t have the ability of invocation, that rests with higher courts.
HDFC Bank, ICICI Bank challenge SEBI move
Separately, HDFC Bank and ICICI Bank have conjointly approached Sat contesting SEBI’s call.
HDFC Bank has Lententide Rs four hundred large integer to Karvy supported these pledged shares.
The counsel for the banks sought-after immediate phase change of all securities that are transferred to shopper accounts. “Pledged shares can not be transferred while not consent of the banks,” the counsel same.
The counsel any argued that going forward banks are going to be forced to hunt further collateral from all brokers thanks to SEBI’s Dec two action.
Karvy’s commerce licence
The Sat conjointly asked the National exchange (NSE) to require a choice on Karvy’s commerce license by Dec vi. The NSE and mad cow disease had on Dec two suspended Karvy’s commerce license.