Karvy case: SAT refuses immediate relief to lenders

The Securities Appellate Tribunal on Wednesday refused any immediate relief to top lenders who had petitioned against the transfer of securities held with Karvy Stock Broking Ltd back to the clients.

ICICI Bank, HDFC Bank and IndusInd Bank had contended that many of these securities have been used to borrow money from them and had asked the tribunal to either get back the securities to them or freeze them in an escrow account.

The case pertains to the securities held by Karvy, which were allegedly used by the brokerage for borrowing courtesy the power of attorneys that they had. The securities held by over 83,000 clients were given back to them on Monday, forcing Bajaj Finance to move SAT and secure an interim relief on further transfers.

The private sector banks joined the petition on Tuesday and there was a lengthy hearing.

On November 22, Sebi barred KSBL from taking new clients in respect of its stock broking activities and also prevented it from using the power of attorney (PoA) given by clients after the broker was found to have allegedly misused clients' securities.

On Wednesday, SAT bench comprising members -- C K G NAIR and Justice M T Joshi -- said no further relief can be granted to the lenders beyond the order in the Bajaj Finance plea.

They asked the lenders to approach Sebi by December 6 with a fresh plea. A Whole Time Member of the regulator would give a personal hearing to the aggrieved parties and pass an order by December 12.