Axis Bank-Karvy matter: SAT says Sebi has 4 weeks to restore pledged shares

The Securities Appellate Tribunal (SAT) on Friday clarified that the market regulator and depositories have four weeks from December 20, 2023, to release shares pledged to Axis Bank by Karvy Stock Broking.

Axis Bank had appealed before the tribunal against the Securities and Exchange Board of India (Sebi) for not releasing the pledged shares, as per an earlier order by SAT issued on December 20, 2023.

“...it is clarified that four weeks from the date of the order were available both to appellant Axis Bank and to Sebi, National Stock Exchange (NSE) and National Securities Depository Limited (NSDL) to implement the directions given by this Tribunal,” noted SAT.

The matter pertains to an appeal by several lenders to whom defaulter Karvy had pledged securities of its clients to the tune of Rs 1,400 crore.

Shares pledged to other lenders like HDFC Bank, Bajaj Finance, ICICI Bank, and IndusInd Bank had been transferred to the clients of Karvy by Sebi and NSDL. The tribunal had ordered compensation to the lenders for these securities within four weeks. The shares pledged to Axis Bank remained intact and had not been encashed. Therefore, SAT had allowed Axis Bank to invoke the pledged share.

Sebi filed an appeal in the Supreme Court on December 30, 2023, against the SAT order of December 20.