Karvy is banned by SEBI for 2000 crore default

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This is really shocking. Guys check this
https://www.thehindubusinessline.com/markets/st...

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I have recently opened a Demat acin Karvvy. Will I be able to transact or not from Monday?

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RockChap wrote:

I have recently opened a Demat acin Karvvy. Will I be able to transact or not from Monday?

Bhai you should not be able to. But bhai let’s see. It’s a big broker. Maybe something might come up

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bikidas2060 wrote:

Bhai you should not be able to. But bhai let’s see. It’s a big broker. Maybe something might come up

something like what?
the paper dragons (e.g.: IRDA, SEBI) are nothing more than cushy retirement homes for incompetent or “yes man” PSU management.

back in 2004-05 whenever we’d get to interact with Parthasarathy sir (of IL&FS) he’d often drop names and encourage us (we were associated with an important arm in the group) to maintain good PR and reach with specific people in UTI and IDBI or other places.
only later we realised that U.K. Sinha became SEBI and other two bigwigs too are today additional secretary level power.
he would also often wish for people from Karvy or others who got us big ticket business, to be entertained at wine and dine events or directly taking them (bosses , mid management of Edelweiss Karvy Motilal Oswal) to Taj or Oberoi.

point is, they might get away with at most a consent order and it will be business as usual.
a consent order= http://google.com/search?q=consent+order what most of the time Anil Ambani’s financial services companies did.
do ghotala, mischief, wilfully break the rules… then pay “X” amount and you are free, without having to accept anything.
[https://www.wsj.com/articles/donald-trump-played-central-role-in-hush-payoffs-to-stormy-daniels-and-karen-mcdougal-1541786601 IRDA, SEBI are the Stormy Daniels, Karen McDougals of India. Any Reliance AMC/ Reliance MF, IL&FS AMC, Karvy MF/ Broking can agree for the consent order and these two will be quiet after that]

that auditors and regulators are not held accountable and the very fact that this can so systematically done for extended periods goes to show the rot we have. smile

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bikidas2060 wrote:

Bhai you should not be able to. But bhai let’s see. It’s a big broker. Maybe something might come up

SEBI has suspended power of attorney given to Karvy by its users so answer is no. Btw it is always recommended to open/maintain a trading account with some major bank or discount brokers like zerodha which are heavily tech dependent & focused on this area only(unlike Karvy which allegedly diverted funds for its real estate arm).

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kajeilt6 wrote:

something like what?
the paper dragons (e.g.: IRDA, SEBI) are nothing more than cushy retirement homes for incompetent or “yes man” PSU management.

back in 2004-05 whenever we’d get to interact with Parthasarathy sir (of IL&FS) he’d often drop names and encourage us (we were associated with an important arm in the group) to maintain good PR and reach with specific people in UTI and IDBI or other places.
only later we realised that U.K. Sinha became SEBI and other two bigwigs too are today additional secretary level power.
he would also often wish for people from Karvy or others who got us big ticket business, to be entertained at wine and dine events or directly taking them (bosses , mid management of Edelweiss Karvy Motilal Oswal) to Taj or Oberoi.

point is, they might get away with at most a consent order and it will be business as usual.
a consent order= http://google.com/search?q=consent+order what most of the time Anil Ambani’s financial services companies did.
do ghotala, mischief, wilfully break the rules… then pay “X” amount and you are free, without having to accept anything.
[https://www.wsj.com/articles/donald-trump-played-central-role-in-hush-payoffs-to-stormy-daniels-and-karen-mcdougal-1541786601 IRDA, SEBI are the Stormy Daniels, Karen McDougals of India. Any Reliance AMC/ Reliance MF, IL&FS AMC, Karvy MF/ Broking can agree for the consent order and these two will be quiet after that]

that auditors and regulators are not held accountable and the very fact that this can so systematically done for extended periods goes to show the rot we have. smile

It hurts like hell to hear like this. laughing Seriously things are really bad

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RockChap wrote:

I have recently opened a Demat acin Karvvy. Will I be able to transact or not from Monday?

so hopefully you could give the physical TIFD (Transfer. Instruction For Delivery) slip, at their branch?
don’t know about Karvy but back then HDFC’s demat desk accepted it till 4pm for se date acknowledgement.
Karvy “Demat” too would have to give clients such transfer facility (despite the order of n their a sister company https://www.sebi.gov.in/enforcement/orders/nov-2019/ex-parte-ad-interim-order-in-respect-of-karvy-stock-broking-limited_45049.html

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iamankur wrote:

so hopefully you could give the physical TIFD (Transfer. Instruction For Delivery) slip, at their branch?
don’t know about Karvy but back then HDFC’s demat desk accepted it till 4pm for se date acknowledgement.
Karvy “Demat” too would have to give clients such transfer facility (despite the order of n their a sister company https://www.sebi.gov.in/enforcement/orders/nov-2019/ex-parte-ad-interim-order-in-respect-of-karvy-stock-broking-limited_45049.html

typos sad
….till 4pm for same date acknowledgement.
Karvy “Demat” too would have to give clients such transfer facility (despite the order of SEBI on their a sister company https://www.sebi.gov.in/enforcement/orders/nov-2019/ex-parte-ad-interim-order-in-respect-of-karvy-stock-broking-limited_45049.html]
the demat companies are always different than the broking companies.

DeMat company is merely a custodian of one’s securities, and TIFD instrument is a legal instrument (in case you wish to shift it to someone’s account, your other joint/single account or to the account of the buyer’s broker’s pool account).

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kajeilt6 wrote:

something like what?
the paper dragons (e.g.: IRDA, SEBI) are nothing more than cushy retirement homes for incompetent or “yes man” PSU management.

back in 2004-05 whenever we’d get to interact with Parthasarathy sir (of IL&FS) he’d often drop names and encourage us (we were associated with an important arm in the group) to maintain good PR and reach with specific people in UTI and IDBI or other places.
only later we realised that U.K. Sinha became SEBI and other two bigwigs too are today additional secretary level power.
he would also often wish for people from Karvy or others who got us big ticket business, to be entertained at wine and dine events or directly taking them (bosses , mid management of Edelweiss Karvy Motilal Oswal) to Taj or Oberoi.

point is, they might get away with at most a consent order and it will be business as usual.
a consent order= http://google.com/search?q=consent+order what most of the time Anil Ambani’s financial services companies did.
do ghotala, mischief, wilfully break the rules… then pay “X” amount and you are free, without having to accept anything.
[https://www.wsj.com/articles/donald-trump-played-central-role-in-hush-payoffs-to-stormy-daniels-and-karen-mcdougal-1541786601 IRDA, SEBI are the Stormy Daniels, Karen McDougals of India. Any Reliance AMC/ Reliance MF, IL&FS AMC, Karvy MF/ Broking can agree for the consent order and these two will be quiet after that]

that auditors and regulators are not held accountable and the very fact that this can so systematically done for extended periods goes to show the rot we have. smile

Understand the difference between PSU and Civil services.
IRDA, SEBI etc are the exclusive domain of retired/senior IAS officers only.
No PSU employee can ever even dream of reaching there.
Even the senior posts of CAG are exclusive reserves of IAS officers and no IA&AS (India Audit & Accounts Service) person has ever being appointed CAG till date.

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That’s definitely one of the largest default cases by stock brokers till date. Well lets see what happens next.

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Mom have almost 10 thousands shares in karvy demat, don’t know what’s gonna with them. Thinking to transfer and divide these to two brokers, zerodha and finvasia.

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varunshenoy wrote:

Mom have almost 10 thousands shares in karvy demat, don’t know what’s gonna with them. Thinking to transfer and divide these to two brokers, zerodha and finvasia.

(openly telling all this!)
please avoid making things more difficult for Auntyji by landing her in avoidable scrutiny (for having “thousands” ×10 scrips😛)

like someone mentioned above, try offline instructions (TIFD slip) if on-line seems to be a bottleneck.
and the three companies, even with banks are different.
The bank is a different company
The Broker (including commodities/MCX) is a different company
and
the DP is entirely different firm.
(Karvy’s R&T business even clarified to MFs that everything is going to work fine for their clients).

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https://www.livemint.com/market/stock-market-ne...
► Sebi observed that all the pledged shares came from client accounts and the lenders did not exercise proper ‘due-diligence’
► The market regulator also found the lenders lapsing as they merely relied on Karvy’s assertions that the pledged shares belonged to the broking firm

The Securities and Exchange Board of India (Sebi) on Friday refused to give any relief to the four lenders -Bajaj Finance Ltd, ICICI Bank, HDFC Bank, IndusInd Bank – of Karvy Stock Broking Ltd. The lenders had lost control over pledged shares after they were transferred by National Securities Depository Ltd (NSDL) into clients’ accounts.
Soon after the transfer, the lenders on 2 December had moved Securities Appellate Tribunal (SAT) seeking reversal of the share transfer. SAT while calling reversal ‘untenable’ had referred the matter to Sebi to consider lenders plea.
In its Friday order, Sebi observed that all the pledged shares came from client accounts and the lenders did not exercise proper ‘due-diligence’. While extending loan against shares (LAS) the banks failed to notice that the bulk of pledged shares did not come from ‘proprietary account’ but from ‘non-house’ account.
The market regulator also found the lenders lapsing as they merely relied on Karvy’s assertions that the pledged shares belonged to the broking firm.
The four lenders including Bajaj Finance, ICICI Bank, HDFC Bank, IndusInd Bank had extended ₹345 crore, ₹642 crore, ₹208 crore and *+₹159*+ crore to the broking firm against pledge shares worth ₹2873 crore as of 16 September 2019. These pledged shares came down to ₹2319 crore in November 2019.
The matter pertains to a 22 November Sebi order where it had barred Karvy from acquiring new clients and acting/ trading on behalf of the clients. The market regulator held that Karvy had misused client securities by pledging them with various lenders without authorization.
These securities were used to raise funds from banks, some of the securities were sold off and the proceeds were transferred to its real estate arm – Karvy Realty Ltd.
“The securities worth around ₹2300 crore of more than 95,000 clients, were unauthorizedly transferred into this account by KSBL to generate funds for its own/group entities use," said NSE in the interim report, which formed the basis of subsequent Sebi order.
Interestingly, Sebi observed that broking firm in its financial statements had disclosed that it held only ₹27.79 lakh of securities in its own account.
“A prudent lender always refers to balance sheet for ascertaining the financial position and solvency of the borrower and also the purpose of loan, before lending," said Anant Barua, Whole Time Member at Sebi.
Sebi in its 20 June circular had sought cessation of using client securities by brokers for funding purposes directly impacted the business activity of lenders.
“Therefore, all pledgees were required to take appropriate action to comply with the circular," said Sebi.
“The issue whether lenders have exercised proper due diligence or has complied with applicable laws pertaining to loans against shares, can be looked into by the concerned regulator, if so deemed fit," the market regulator added.

From: https://www.livemint.com/market/stock-market-ne...

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