What Karvy Stock Broking has done can't be allowed: Sebi chief Ajay Tyagi

Regulator says looking to tighten related-party transaction norms

Ajay Tyagi, chairman, Securities and Exchange Board of India (Sebi), on Wednesday denounced the practices followed by Karvy Stock Broking.

“More than governance, what was never allowed was being done,” he said on the sidelines of the OECD-Asian Corporate Governance Roundtable. “It is not that separation (of client accounts) was asked in June. It isn’t anyone’s case to use client securities for investing in other businesses. It can’t be allowed.”

Sebi on Friday had issued an ex-parte interim order against Karvy for misusing client funds. The brokerage has allegedly pledged the securities of its clients to raise funds to invest in other