The Securities Appellate Tribunal (SAT) on Friday directed Sebi to hear Karvy Stock Broking’s appeal on restricting usage of power of attorney (PoA) in an earlier ex-parte order passed by the markets regulator on November 22. The appellate tribunal directed that Sebi should decide on the matter by Monday.
The power of attorney allows the brokerage to make transactions on behalf of clients after their authorisation. On November 22, Sebi had barred Karvy from using PoA after the broker allegedly indulged in trades without authorisation. Sebi’s action was primarily based on a probe report by the National Stock Exchange (NSE), which said the broker had indulged in various unapproved transactions.
“The revocation of PoA has resulted in the appellant’s inability to execute instructions given by clients… they are unable to transfer (of securities) or settle trades with the Clearing Corporation of India. Since clarification is sought, we deem it fit and proper that Sebi looks into the matter by giving Karvy an opportunity of hearing and passing final orders by Monday,” the Judges presiding over SAT said.
Karvy’s counsel on Friday said the order was a “commercial death” for the brokerage. Following the order, Karvy had written to Sebi on November 24 seeking a hearing to appeal some aspects of the order, which the markets regulator did not respond to, the counsel said.