This article is more than 2 year old.

Karvy’s lenders look at DRT, IBBI options for recovery, says report

Mini

According to the report, a total of seven entities have lent more than Rs 1,400 crore to the brokerage against share collateral worth Rs 2,319 crore.

Karvy’s lenders look at DRT, IBBI options for recovery, says report
Lenders to Karvy Stock Broking Ltd have started exploring other avenues for recovery of dues including filing pleas with the Debt Recovery Tribunal (DRT) and Insolvency and Bankruptcy Board of India (IBBI), and selling minority stakes in sister concerns of Karvy, reported LiveMint.
According to the report, a total of seven entities have lent more than Rs 1,400 crore to the brokerage against share collateral worth Rs 2,319 crore.
“Most of the lenders have decided against appealing Sebi’s decision as by now majority of shares have been transferred to client accounts and are out of their reach," the newspaper quoted a person with direct knowledge of the matter.
“In addition to shares, the lenders had taken other assets as collateral which can be used for recovery," he told the newspaper.
ICICI Bank Ltd on 20 December became the first lender to approach the Hyderabad DRT for recovery of dues. If the broking firm does not deposit an equal amount of collateral with the tribunal by 5 January, assets of Karvy and its promoters can be attached, the report added.
Karvy had pledged shares belonging to clients and used them to raise funds which were then transferred to its sister concerns such as Karvy Realty Ltd. On 22 November, Securities and Exchange Board of India (Sebi) barred Karvy from acquiring new clients and from using power of attorney, thereby preventing the company from trading on behalf of clients after the broker allegedly transferred clients’ money for other purposes and indulged in trades that were not authorized by them.
next story

Market Movers

Currency

CompanyPriceChng%Chng