NSE probe into Karvy dealings likely

The National Stock Exchange (NSE) is likely to start investigation into the share dealings of Karvy Stock Broking in its Salt Lake branch if the broking outfit fails to come out with a satisfactory reply in 15 days.

Sources in NSE told Business Standard that it had written a letter to Karvy Stock Broking following two complains from two retail investors.

Incidentally, Karvy Stock broking is registered with NSE. "NSE sent the letter to Karvy earlier this week. The exchange has given 15 days time for the reply. If they fail to do so then NSE will start investigations on the share dealing of the Salt Lake branch," sources said.

However, NSE sources informed that there is no mention of any monetary loss in any of the two complains received by the exchange. 'Both the investors only alleged that unauthorised transaction took place in their account without their consent,' said sources.

Incidentally, there were reports in a section of the media that Karvy Stock Broking has allegedly siphoned off shares from the clients account for their own gain.

It was also alleged that Karvy has not transferred the shares purchased by some clients to their respective depository accounts. However, sources in Sebi informed that it has not yet received any complain from any retail investors in this regard.

When contacted, the senior manager of Karvy Stock Broking, Sujit Kundu dismissed the allegation that Karvy Stock Broking as an organisation is involved in the illegal transactions of shares.

He claimed that the former branch manager of the Salt Lake branch of Karvy Stock Broking, Timir Mukherjee, has masterminded the entire illegal dealings.

'He along with his wife and associates have done all these things. We have 11 branches in Kolkata and 366 in the country. There is no report of any illegal transaction in any other branches,' Kundu said.

According to Kundu, all the illegal activities took place between October and January in Salt Lake branch. Mukherjee resigned in January.

During the audit in February, Karvy came to know about the illegal dealing. According to Kundu, Karvy has already filed FIR against Timir Mukherjee. 'He along with his wife is now absconding,' Kundu alleged.

Kundu also claimed that it has already paid Rs 1 crore to the affected clients. 'The magnitude of fraud will be around that,' he added.