Funds, securities worth Rs 2,300 cr settled in Karvy case, says NSE

Leading stock exchange NSE on Tuesday said funds and securities worth Rs 2,300 crore belonging to about 2.35 lakh investors of Karvy Stock Broking Ltd have been settled so far.

The case pertains to Karvy unauthorisedly transferring securities of clients into one of its Demat accounts by misusing the PoAs (Power of Attorney) given by its clients.

The exchange has, in coordination with other market infrastructure institutions and under the guidance of Sebi, transferred securities to respective clients, invoked bank guarantees deposited with clearing corporations and liquidated securities held by Karvy Group companies, NSE said in a statement.

"While disciplinary proceedings are underway, funds and securities of approximately Rs 2,300 crore belonging to about 2.35 lakh investors have been settled so far, with efforts focused on the settlement of small investors," the exchange said.

Investors with fund balances up to Rs 30,000 due from Karvy Stock Broking Ltd have been settled.

The watchdog, in November last year, had barred Karvy from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients' securities to the tune of more than Rs 2,000 crore. The firm misused client collateral for its own trades.

Besides, Karvy was disabled (trading rights are withdrawn) by the National Stock Exchange (NSE) in December 2019.