HYDERABAD: In the ongoing Karvy Stock Broking Ltd’s alleged misuse of clients’ securities case, the Securities Appellate Tribunal (SAT) on Thursday dismissed Axis Bank’s plea seeking interim stay on Securities and Exchange Board of India (SEBI) order.
The tribunal also reserved its order on Axis Bank’ plea challenging National Securities Depository Ltd’s (NSDL) move to keep in abeyance shares pledged by Karvy.
On Wednesday, the private lender in a petition filed with the SAT sought quashing and setting aside of NSDL’s move to keep shares in abeyance stating that the move was illegal as it was contrary to applicable laws. It also sought a restraining order against NDSL, SEBI, and CDSL from taking action that will prevent the bank from exercising its pledge over the shares.
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Karvy borrowed Rs 100 crore from Axis via an overdraft against shares facility in April. Of this, Rs 80 crore was due for repayment in December, when the bank failed to recover its outstanding dues thanks to NDSL’s move keeping them in abeyance.
According to Axis Bank, the market regulator’s order does not apply in its case as shares pledged by Karvy were held in a different depository participant account, which was not covered under the order.
Others who moved to the SAT include ICICI Bank, HDFC Bank, IndusInd Bank and Bajaj Finance. The tribunal refused any interim relief and directed them to approach SEBI, which is expected to pass the order in the next few days.
It may be recalled that on November 22, SEBI in an ex-parte order barred Karvy from adding new customers besides preventing the brokerage from exercising the Power of Attorney given by clients. The order was based on a preliminary probe by the NSE, which subsequently suspended Karvy’s license putting the brokerage out of business for now.
SAT reserves order on Axis’ plea on NSDL
The Securities Appellate Tribunal (SAT) has also reserved its order on Axis Bank’ plea challenging National Securities Depository Ltd’s (NSDL) move to keep in abeyance shares pledged by Karvy Stock Broking Limited