Final hearing in NSDL case pushed back by 2 weeks

Case pertains to IPO where parts of public issues reserved for the retail investor were cornered by entities using fictitious demat accounts

The Securities Appellate Tribunal (SAT) has adjourned the final hearing in an appeal filed by National Securities Depository Ltd (NSDL). The case will now be heard on July 22. SAT hears appeals against the Securities and Exchange Board of India’s (Sebi) orders.

In the case of NSDL, the order pertains to the initial public offering (IPO) case, where parts of public issues reserved for the retail investor were cornered by entities using fictitious demat accounts. These accounts which allow physical share certificates to be held in electronic or dematerialised form were maintained by depositories such as NSDL.

A Sebi committee found NSDL to have failed in its duties and asked that it establish individual responsibility for the same.  The regulator later held these orders to be void by a subsequent order in February 2010.

The former head of NSDL, C B Bhave, was chairman of Sebi at the time. The regulator came out with yet another order, asking NSDL to comply with the original orders. This happened after C B Bhave’s term ended. The depository subsequently moved SAT against the latest order.