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Karvy represents to SEBI but does not get hearing

Written by: Staff

Mumbai, May 2 (UNI) The Securities and Exchange Board of India (SEBI), which had banned 24 intermediaries from trading in the stock market for their involvement in a multi-crore IPO scam, today did not grant hearing to Karvy Group against its order.

But an official of the brokering firm claimed Andhra Pradesh High Court today granted interim stay on the regulator's order directing investors to shift their demat accounts within 15 days of the SEBI order of April 27.

Karvy vice president J Ramaswamy said their petition against SEBI order was today admitted by the Court.

Meanwhile, Karvy officials led by Chairman C Parthasarathi today submitted their representation to SEBI whole time Director G Anantharaman and sought personal hearing. However, the regulator did not give any firm date for the hearing.

''SEBI has taken on record the submission and would fix the date sometimes this week for the personal hearing'', said Ramaswamy.

He told UNI that Karvy has submitted its case in response to SEBI's charge against the broking firm's alleged involvement in the demat scam.

SEBI, in its crackdown on April 27, had barred 24 market entities, including India Bulls and Karvy, from issuing fresh demat accounts to the public while giving 15 days to investors to shift their accounts from tainted broking houses.

Following this, Karvy officials had rushed to the market regulator seeking hearing but could not get the opportunity to represent their case before Mr Anantharaman who had to go out of Mumbai that day.

Karvy Stock Broking Ltd (KSBL), in its submission, said it had no malafide intention in issuing single refund orders to various institutions that have funded initial public offerings. ''We only wish that SEBI had given us an opportunity of being heard before passing such a harsh order,'' Ramaswamy added.

''We believe that the inspection of our operations undertaken by the depositors or SEBI did not reveal any serious voilation, especitaly those with a malafide intent'', he reiterated.

SEBI's ban came in the wake of its findings that these entities were indulging in ''abusive practices'' in initial public offerings (IPOs) of various companies.

SEBI, which probed malpractices in 105 IPOs during 2003-05, has also asked 12 depository participants not to open fresh accounts.

In its interim order, SEBI also barred 85 financiers of key operators from operating in the stock market.

HDFC Bank, IDBI Bank, Central Bank, ING Vysya Bank, IL&FS and Motilal Oswal have been asked by the market regulator not to open fresh demat accounts.

KSBL accounts for Rs 250 crore of the Karvy Group's total turnover of about Rs 400 crore. Karvy is one of India's largest stock brokers with 2.9 lakh customers. Over 35,000 individual customers trade with Karvy on a daily basis.


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