New Delhi: The capital markets regulator, Securities and Exchange Board of India (Sebi) sent notices to stock exchanges BSE and NSE on Wednesday, requesting that they pay over Rs 5 crore in a case involving Karvy Stock Broking Ltd (KSBL) and threatening to attach assets and bank accounts if they do not pay within 15 days.
The letters were issued after the exchanges failed to pay the Sebi’s penalties. Sebi fined BSE and NSE Rs 3 crore and Rs 2 crore, respectively, for "laxity" in detecting KSBL's misuse of clients' securities, according to an order issued on April 12. The case concerns KSBL misusing client securities worth Rs 2,300 crore, which belonged to over 95,000 customers, by pledging them from a single demat account.
The monies received in response to the commitment were used by KSBL for its own purposes as well as those of its group companies. This money was used by KSBL and its related entities to raise Rs 851.43 crore from eight banks/NBFCs. Sebi ordered BSE and NSE to pay Rs 3.09 crore and Rs 2.06 crore, respectively, along with additional interest, all costs, charges, and expenditures within 15 days, in two separate notices. These sums include the penalty, interest accrued from April 12 to the present, and recovery costs.
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