March 18, 2014
PR No. 026/2014
Order in the matter of irregularities in IPO in respect of Karvy Stock Broking Limited, Stock Broker
Shri Prashant Saran, Whole Time Member, SEBI, has passed an order
dated March 14, 2014 in the matter of irregularities in IPO in respect of
Karvy Stock Broking Limited. The order prohibit Karvy Stock Broking
Limited (Stock Broker), from taking up any new assignment or
contract or launch a new scheme (i.e., not to take new clients/customers) for a period of six months in respect of its
business as a stock broker.
SEBI had conducted a preliminary examination, upon noticing certain
irregularities with respect to IPO of different companies. A few
individuals/ entities (referred to as 'the key operators') had opened
various demat accounts (referred to as 'afferent accounts') in
fictitious/ benami names and cornered/ acquired the shares of IPOs in
the category of retail investors using these accounts. Pursuant to the
allotment, the shares were transferred to the demat account of these
key operators and from thereon to ultimate beneficiaries, who were
the financiers in the process. It was observed that the "Karvy Group"
comprising of - Karvy Stock Broking Limited, Karvy Consultants
Limited, Karvy Computershare Private Limited, Karvy Securities
Limited and Karvy Investor Services Limited, had allegedly assisted,
aided and abetted the key operators in cornering the shares issued in
the IPOs.
Mumbai
March 18, 2014
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