Tribunal stays Sebi's order against Karvy

The Securities Appellate Tribunal (SAT) today stayed a Securities and Exchange Board of India (Sebi) order banning domestic brokerage firm Karvy Stock Broking (KSBL) from acting as a broker for three months and as depository participant till December 31.

After listening to counsels of both KSBL and Sebi, SAT's three member bench of Justice N K Sondhi, Arun Bhargava and Uttpal Bhattacharya stayed the regulator's order of June 22.

Karvy had appealed against Sebi's final order in the IPO scam suspending its license for three months, while prohibiting it from opening new demat accounts till the end of this year.

As per the Sebi order, the registration certificate of KSBL, a member of BSE, NSE and Hyderabad Stock Exchange, was to be suspended for three months on the expiry of 21 days from the date of the order.

The regulator had also prohibited Karvy Computershare from acting as a registrar to any issue for nine months.

However, as it had already undergone the prohibition for that period after an interim order on April 27, 2006, there would be no further direction against Karvy Computershare, SEBI order had said.

Sebi in its order had said, 'it was fairly established that Karvy DP and the group was very much in the thick of the entire process of abuse of the IPO process and the penalty was imposed on the basis of the available materials on record'.