Sebi to give post-decisional hearing to Karvy next week

Mumbai, May 2 | Updated: May 3 2006, 05:30am hrs
Securities and Exchange Board of India (Sebi) has on Tuesday accepted the written submission from some broking firms including Karvy Stock Broking Ltd, who were named in the IPO demat scam. The regulator has assured that a date for personal hearing will be given to them some time next week. These entities were alleged to have been involved with respect to their depository participants (DPs) operations.

Sebi in its ex-parte order issued last week had said, all the entities named in the order can avail the opportunity of the post decisional hearing within 15 days from the date of the order.

According to sources, some of the other brokers and DPs named in the scam report were also trying to seek an appointment with Sebi for a hearing and were also asked to approach the regulator some time next week.

It is learnt that Karvy was represented by advocate Vinay Chauhan while Anagram Stock Broking and Motilal Oswal Securities are represented by Anil Shah of Mumbai-based Juris Matrix.

The operations of the Karvys DP entity were the worst hit as Sebi asked it to move all its DP accounts (more than 7.5 lakh in number) to other DPs within 15 days. It is learnt that Karvy Stock Broking simultaneously moved the Andhra Pradesh High Court against Sebi order on Tuesday when they were seeking a hearing from Sebi. It is also learnt that AP High Court has stayed the part of Sebi order with respect of transferring the accounts and has lifted the ban on opening the fresh DP accounts.

Sebi officials refused to react to Karvys move to approach the court, saying the matter is sub-judice. However, sources in the investigation department said this move will in no way hamper Sebis investigation in the matter. Other players, who along with Karvy sought Sebi hearing on Tuesday, said they are not planning any legal recourse as the Sebi order against them is not as harsh as the one against Karvy.