SAT quashes 2 Sebi orders in Karvy case

New Delhi: The Securities Appellate Tribunal (SAT) has quashed two orders issued by the Sebi against top lenders, prohibiting them from revoking the shares pledged by Karvy Stock Broking.

The order came after the Axis Bank, the HDFC Bank, the ICICI Bank, the IndusInd Bank and Bajaj Finance moved the appellate tribunal against the Sebi orders. The SAT quashed the two orders passed in January 2020 and December 2019 that barred lenders to invoke the pledge on shares in the Karvy Stock Broking Limited (KSBL) matter. The tribunal allowed the lenders to invoke the shares pledged in their favour.

“A direction is given to Sebi, National Stock Exchange (NSE) and National Securities Depository Limited (NSDL) to restore the pledge which was made in favour of the appellants within four weeks,” the SAT said in its order. In the alternative, the Sebi, NSE and NSDL have been directed to compensate the appellants (lenders) with the value of the underlined securities pledged in their favour, along with interest at 10 per cent per annum, within the same period.

The total dues payable to these lenders are more than Rs1,400 crore, according to the order passed by the Securities and Exchange Board of India (Sebi) in December 2019. An outstanding amount of Rs80.64 crore, along with interest, was due to the Axis Bank from Karvy, Rs642.25 crore to the ICICI Bank, Rs344.5 crore to Bajaj Finance, Rs208.5 crore to the HDFC Bank and Rs159 crore to the IndusInd Bank, the order noted.