HC stays Sebi order on Karvy demat accounts

Sebi had in its April 27 order banned Karvy and other intermediaries from trading in the stock market through proprietary accounts for their involvement in the multi-crore IPO scam.

The market regulator had given clients of the indicted intermediaries 15 days to switch over to other DPs. When contacted, Sebi chairman M. Damodaran refused to comment on the court order. A Karvy spokesperson too refused to comment on the development, saying they were yet to receive the court order. ‘‘We will submit the order to Sebi as and when we get it,’’ he said.

Other depository participants were campaigning to poach Karvy’s clients. ‘‘Other depository participants are trying to attract our clients by campaigning before our offices everywhere. But luckily we have a large client base and only some of them have transferred their accounts,’’ a Karvy official said.

Indiabulls Securities, which was also banned from dealing in proprietary accounts by Sebi in its order had got its order kept in abeyance from Sebi on April 28, 2006. Sebi had clarified that the DP transactions of clients of Karvy DP and Pratik DP would remain unaffected for 15 days.

A representation from Karvy group had on Tuesday gone to Sebi for submitting its appeal and is awaiting a response from the regulator, he added.

On Thursday, April 27, 2006, market watchdog Sebi came out with its interim order on IPO scam pointing out Karvy as the depository participant with the most number of fictitious accounts, contributing to 80 per cent of those found out in NSDL.

‘‘Karvy DP alone had 29,309 afferent accounts representing about 80 per cent of the total afferent accounts in NSDL,’’ the Sebi order said. The regulator had ordered Karvy to stop trading through its proprietory account and gave it 15 days for carrying out clients’ transaction in the routine course. (With PTI)

Sebi to hear Karvy next week

MUMBAI: Karvy Stock Broking Ltd, represented by its managing director Parthasarthy and his team of lawyers queued up at the office of G. Ananthraman, whole-time member of Sebi on Tuesday for a personal hearing. Other prominent entities that appeared before Ananthraman were Anagram Stock broking Ltd and Motilal Oswal Securities Ltd. Sebi has accepted the written submissions from all these broking firms and has assured them that a date for a personal hearing will be given to them some time next week in the wake of an order passed by the regulator in IPO demat scam, in which all these and others were alleged to be involved with respect to their depository participants (DPs) operations. ENS