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ULIP: SEBI in court blitz to stall insurers

business Updated: Apr 16, 2010 00:28 IST
Sandeep Singh
Sandeep Singh
Hindustan Times
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For SEBI, it’s a battle to the end.

After passing its April 9 semi-judicial order, restraining 14 insurance companies from marketing and selling unit linked insurance plans (ULIPs), capital markets regulator Securities and Exchange Board of India (SEBI) filed a caveat on Monday with various high courts, including Andhra Pradesh High Court, in a bid to restrain them from granting interim relief against the order to the 14 companies.

Caveat is a notice given by one party in a court, with a plea to not act till the party giving the notice has been heard.

“We apprehend that the respondent herein may approach this Hon’ble Court by filing writ petition questioning the orders dated (April 9) passed by SEBI, without approaching the Appellate Authority, viz, Securities Appellate Tribunal (SAT), Mumbai,” said an April 12 Caveat filed by SEBI.

The caveat, a copy of which is with Hindustan Times, is in the name of ING Vysya Life Insurance, which confirmed receiving it. The caveat has been filed in relation to all the 14 insurers, a source close to the development said.

The SEBI spokesperson declined to comment.

The caveat goes on to say that in case an insurance company approaches the High Court, SEBI will have to be heard.

Legal experts at insurance companies said this was done to restrain insurance companies. “I think this was done to prevent the insurance companies from getting an interim relief from a high court in the form of a stay order,” one legal expert said.

The caveat says the respondent (insurance companies) can appeal in SAT and against the order of SAT in Supreme Court.

In May 2006, the Andhra Pradesh High Court has passed an interim order, staying a SEBI order that asked clients of Karvy Stock Broking Ltd, named in the multi-crore IPO scam, to transfer their accounts to other depository participants.