90% investors get back their securities
Markets regulator Sebi's prompt action against Karvy Stock Broking Ltd (KSBL) has resulted in nearly 83,000 investors getting back their securities,...
New Delhi: Markets regulator Sebi's prompt action against Karvy Stock Broking Ltd (KSBL) has resulted in nearly 83,000 investors getting back their securities, which were illegally transferred by the broker to its own account and were even pledged without any authorisation.
With the latest transfer by National Securities Depository Ltd (NSDL), nearly 90 per cent investors have got back their securities and the remaining ones will get after clearing their dues.
Karvy has taken loans to the tune of Rs 600 crore by pledging securities worth more than Rs 2,300 crore of 95,000 clients with lenders.
Of these, 95,000 clients, nearly 83,000 of them have got back their securities, which were were illegally transferred by the KSBL to its own account.
"As per the directions of Sebi and under supervision of NSE, securities have been transferred from the demat account - named Karvy Stock Broking Ltd to the demat accounts of respective clients who have paid in full against these securities.
The number of such clients who have received securities are 82,599," NSDL said in a circular.
The timely action assumes significance as any delay could have led to invoking of pledge by lenders with whom the broker had pledged the clients' securities.
According to market experts, timely action by Sebi has also averted PMC Bank-like situation.
Sebi said that Karvy unauthorisedly transferred securities worth Rs 2,300 crore of more than 95,000 clients,
into one of its demat accounts, by misusing the PoAs (Power of Attorney) given by its clients.