SEBI heat 'very harsh', says Karvy
Karvy Group, whose stock broking arm is facing the heat from SEBI for its role in the multi-crore IPO scam, on Friday termed a ban on its participation in stock market as "very harsh".india Updated: Apr 28, 2006 18:47 IST
Karvy Group, whose stock broking arm is facing the heat from SEBI for its role in the multi-crore IPO scam, on Friday termed a ban on its participation in stock market as "very harsh" and said it would file its objections.
Quoting the SEBI order, in which Karvy Stock Broking (KSB) figured as one among the 85 financiers involved in IPO scams, it said: "KSB has not financed any IPO customer till date. The SEBI order refers to KSB as financier to DB Mehta in the NTPC issue. Neither KSB, nor any of its associate companies financed the said investor for the said issue."
The investor has a secondary market trading account with KSB Mumbai branch and he had transferred shares into our pool account on the day the securities were listed and sold the shares in the market.
SEBI appears to have mistaken the transfer of securities in our pool account by a customer, who was subsequently paid the proceeds, as a wrongful act of Karvy, the group said in a statement.
Referring to the SEBI order that said a few of Karvy's sub-brokers were involved in opening fictitious accounts, it said: "SEBI has alluded in the report that the certificates of introduction issued by the bankers are forged and they have been issued with connivance of Karvy.
"This is baseless and simply based on the bank concerned along with the said individuals, who seemed to have acted in collusion and now shifting the blame."
Karvy argued that the bank certificates were issued with the knowledge of the bank concerned, because otherwise, they could not have issued loans and credited refunds to the mentioned accounts.