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Karvy Stock Broking challenges Sebi order in SAT

Last week , Sebi banned Karvy Stock Broking for client defaults worth Rs2,000 crore.

, ET Bureau|
Updated: Nov 28, 2019, 10.05 PM IST
Karvy challenges SEBI's order in SAT
Karvy challenges SEBI's order in SAT
Karvy Stock Broking has moved the Securities Appellate Tribunal(SAT) seeking relief to allow the firm to tender securities for settlement.

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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