STOCK MARKET BSE NSE

Centre orders SFIO probe against Karvy Stock Broking on alleged financial irregularities

On its part, Karvy challenged the MCA order in High Court on Tuesday, but its petition was dismissed and now it is expected to file a fresh petition on Wednesday.

Published: 04th March 2020 12:13 PM  |   Last Updated: 04th March 2020 12:13 PM   |  A+A-

Karvy Group chairman C Parthasarathy

Karvy Group chairman C Parthasarathy

By Express News Service

HYDERABAD: The noose is further tightened on Karvy Stock Broking Ltd with the Ministry of Corporate Affairs (MCA) ordering a probe by the Serious Fraud Investigation Office (SFIO) into the alleged financial irregularities.

The order issued on February 27, directed SFIO officials to investigate not only into the affairs of Karvy and its group companies but also nine other entities including Wizard Insurance Services, Zenith Insurance Services, Buoyant Insurance, Nova Wealth Management Services, Karvy Consultants, Vitalink Wealth Advisory Services, Classic Wealth Management Services Pvt Ltd, Champion Insurance Services, and Pelican Wealth Advisory Services.

The investigation initiated under Section 212 (1) of the Companies Act, 2013 was based on the Registrar of Companies’ inquiry report submitted on February 24, pointing towards a potential fraud at the city-based brokerage.

"...In exercise of powers conferred under Section 212 (1) (a) & (C) of the Companies Act, 2013 the central government has formed an opinion that the affairs of the above referred companies need to be investigated to examine the serious nature of fraud committed as large public interest is involved," it said.

On its part, Karvy challenged the MCA order in High Court on Tuesday, but its petition was dismissed. It’s expected to file a fresh petition on Wednesday. Karvy sought interim relief so as to prevent MCA officials from taking any 'coercive steps including investigation under Section 212 of the Act.'

It further argued that the RoC’s investigation under section 206 to 208 were ongoing besides of course the final decision of markets regulator SEBI, which barred the company from doing business. Karvy officials hoped the confusion will be put to rest after their deliberations with the MCA due this Thursday.

"We will file a fresh petition tomorrow (Wednesday). This (its Monday’s petition) wasn’t correctly filed. We weren’t give adequate time to respond to the section 206 (1) notice," C Parthasarathy, chairman, Karvy told this publication. SEBI barred it from opening new trading accounts based on an NSE inquiry alleging the brokerage raised money pledging clients’ shares. 



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL_2020
flipboard facebook twitter whatsapp