HYDERABAD: A year after an investigation by the National Stock Exchange (NSE) blew the lid of the Karvy Stock Broking Ltd (KSBL) demat scam, the stock exchange has now declared the Hyderabad-based broking firm as a defaulter and expelled it from its membership.
NSE said in a release that it has expelled KSBL from the exchange membership under Rules 1 and 2 of Chapter IV of the NSEIL Rules and also declared it a defaulter under provision 1(a) of Chapter XII of the exchange bye laws.
The declaration as defaulter and expulsion from membership is effective after close of market hours on November 23, NSE said in the release issued on Monday.
It was only last week that NSE said that it had settled the claims of about 2.35 lakh investors whose securities or funds worth Rs 2,300 crore were stuck for a year.
In November last year, markets regulator Sebi had banned KSBL for transferring the securities of its clients into its own demat account without their permission and then pledging these securities to raise funds that were eventually diverted to group companies like Karvy Realty.
In January this year the Union ministry of corporate affairs (MCA) too had ordered the Registrar of Companies, Hyderabad, to look into the affairs of the Karvy group under Section 206 of the Companies Act. The ROC Hyderabad probe too had found that Karvy misused the power of attorney (POA), given by its clients for trading purposes, to transfer their shares to its own accounts and pledged them to raise funds.
NSE said in a release that it has expelled KSBL from the exchange membership under Rules 1 and 2 of Chapter IV of the NSEIL Rules and also declared it a defaulter under provision 1(a) of Chapter XII of the exchange bye laws.
The declaration as defaulter and expulsion from membership is effective after close of market hours on November 23, NSE said in the release issued on Monday.
It was only last week that NSE said that it had settled the claims of about 2.35 lakh investors whose securities or funds worth Rs 2,300 crore were stuck for a year.
In November last year, markets regulator Sebi had banned KSBL for transferring the securities of its clients into its own demat account without their permission and then pledging these securities to raise funds that were eventually diverted to group companies like Karvy Realty.
In January this year the Union ministry of corporate affairs (MCA) too had ordered the Registrar of Companies, Hyderabad, to look into the affairs of the Karvy group under Section 206 of the Companies Act. The ROC Hyderabad probe too had found that Karvy misused the power of attorney (POA), given by its clients for trading purposes, to transfer their shares to its own accounts and pledged them to raise funds.
