February 28, 2024 19:12 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Calcutta HC grants bail to ex-Sandeshkhali CPI(M) MLA Nirapada Sardar, raps govt over his arrest | ‘Our MSMEs have great opportunity to be part of global supply chain', says PM Modi | Indian-origin author Nitasha Kaul, who was deported over 'anti-India views', claims 'all lies' | 'How will retired district judges survive': Supreme Court questions Centre on pension amount | Cross-border terrorism emerging from Pakistan being given befitting response: S Jaishankar
SEBI revokes Karvy Stock Broking's registration for misusing clients' funds

SEBI revokes Karvy Stock Broking's registration for misusing clients' funds

India Blooms News Service | @indiablooms | 31 May 2023, 11:31 pm

Mumbai: The Securities and Exchange Board of India (SEBI) on Wednesday said it has cancelled the registration of brokerage firm Karvy Stock Broking Ltd (KSBL) due to its improper use of clients' funds and securities, media reports said.

SEBI found that Karvy had engaged in the transfer of funds from clients' accounts to its own accounts, which were subsequently transferred to the group companies associated with the brokerage house.

According to SEBI's order, Karvy Stock Broking Ltd (KSBL) had raised loans from financial institutions by using shares of its clients as collateral.

The total loan amount raised was Rs 2,032.67 crore, and the value of securities pledged by the stockbroker was Rs 2,700 crore during the relevant period.

The brokerage firm also failed to settle clients' funds and securities as required by regulations.

It also did not provide details of its bank account and depository participant accounts. Furthermore, Karvy did not cooperate with the forensic auditor in properly assessing its assets and liabilities concerning clients.

In November 2019, SEBI had imposed a ban on Karvy Stock Broking Ltd (KSBL) from taking on new clients after allegations emerged that the firm had misused clients' funds and securities amounting to Rs 2,000 crore.

The ban was issued based on a preliminary report submitted by the National Stock Exchange (NSE) to SEBI, highlighting non-compliance and potential misuse of clients' securities by Karvy. SEBI has now cancelled the certificate of registration of Karvy Stock Broking Ltd under the intermediaries' regulations, declaring Karvy as a defaulter.

The brokerage firm was also expelled by both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in November 2020.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.