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Sebi puts Karvy-HNIs nexus under scanner, EY conducts forensic audit

Regulatory sources say their prime objective is to ensure that innocent clients whose funds and securities are stuck with the brokerage are returned safely

Karvy
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Karvy’s

Samie Modak Mumbai
The Securities and Exchange Board of India (Sebi) and exchanges are probing alleged connivance between Karvy Stock Broking (KSBL) and some of its wealthy clients. Sources say the possibility of high net-worth individuals (HNIs) giving consent to the Hyderabad-based brokerage to pledge their shares to earn additional income on their idle portfolio can’t be ruled out.

While there is a formal system, known as securities lending and borrowing (SLB) mechanism, to loan shares to other market participants — typically short-sellers — it is yet to gain traction in a big way, prompting some investors to enter into informal arrangements with their

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First Published: Nov 28 2019 | 11:48 PM IST

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