SAT denies relief to banks, sends them back to Sebi
Mumbai: The Securities Appellate Tribunal (SAT) on Wednesday refused any immediate relief to top lenders who challenged the transfer of securities held with Karvy Stock Broking back to the clients or transfer them into an escrow account.
ICICI Bank, HDFC Bank and Indusind Bank had contended that many of these securities had been used to borrow money from them and had pleaded with the tribunal to either get back the securities back to them or put them in an escrow account to protect their funds. The case pertains to the securities held by Karvy, which were used by the brokerage for borrowing courtesy the power of attorneys that they held. The securities held by over 83,000 clients were given back to them on Monday after Sebi asked NSDL to do so, forcing Bajaj Finance to move the SAT and secure an interim relief on further transfers.
These private sector banks joined the Bajaj Finance petition on Tuesday and there was a lengthy hearing. On Wednesday, SAT bench comprising MT Joshi and CKG Nair refused to give nay relief to the lenders beyond the order in the Bajaj Finance plea and instead asked them to approach Sebi by December 6.
On these banks' specific request for either getting back the securities which have been given out as loans or at least freezing them till a decision is reached, the SAT maintained that such a plea is "untenable" as the securities are already with the clients. Legal sources on Wednesday said the combined value of the loans given out by the petitioning lenders using the securities which were with Karvy is Rs 1,400 crore, while the total value of the securities at the time of the transfer was Rs 2,800 crore.