Karvy to appeal against Sebi order on IPO scam

Hyderabad April 28 | Updated: Apr 29 2006, 05:30am hrs
Karvy Group chairman C Parthasarathy on Friday said the company will file within a week an 'appeal' with their objections to the market regulator Sebi's order on Thursday barring them from offering their services for their alleged involvement in the IPO scam.

"It is totally shocking to us, we had not expected it," Mr Parthasarathy told the media at a hurriedly called media conference at the opening hours of the trading here.

Expressing satisfaction over the revision of the order allowing retail investors to continue trading through Karvy, Mr Parthasarathy said: "It gives tremendous relief to us. We are very happy for allowing retail trade to continue."

While admitting that there was an element of fraud committed by a handful of sub-brokers at their Mumbai and Ahmedabad branches, Mr Parthasarathy said the company has to once again work hard to regain the credibility in the market. "We have not lost any big customers since the YES Bank episode, but we have to gain credibility in the market."

Further, Mr Parthasarathy said the company had filed criminal complaints against those sub-brokers who were named by Sebi for committing fraud. Besides, the company has also suspended the employees found responsible for the fraud. Though these sub-brokers were associated with Karvy for about four to five years, they had misled the company, he said. Of about eight lakh DP accounts, the company had found that about 65,000 accounts were of suspicious nature and they have been closed. "We were victims of a fraud perpetuated by these individuals, who projected themselves as sub-brokers in the primary market," Mr Parthasarathy said.