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Prime Broking is awaiting a showcause notice from the National Stock Exchange (NSE) on why it shouldn’t be declared a defaulter.
On July 2, the brokerage had moved the Bombay High Court, seeking a stay on being declared a defaulter, court documents showed. The judges, S J Vazifdar and M S Sonak, had declined to grant the stay, after it was stated the brokerage would be given an opportunity to reply on the issue after a show-cause notice was issued.
“The respondents state a show-cause notice is yet to be issued and the petitioners would be afforded an opportunity of dealing with the same, in accordance with the procedure prescribed by the bylaws, rules and regulations of the respondents and thereafter, the respondents would consider initiating action against the petitioners. The statement is accepted,” the court order said.
Respondents to the petition included the National Securities Clearing Corporation Limited, a wholly-owned subsidiary of the NSE.
The NSE has already disabled the brokerage’s terminals. It had also started the process of declaring the entity a defaulter, said a source.
Earlier, NSE had announced it was investigating the transactions of Prime Broking and related entities, as well as trades related to the shares of jewellery company Gitanjali Gems. In its announcement dated June 28, it had added it was halting the payouts for the transactions under investigation.
N Jayakumar, managing director, Prime Securities, did not reply to a message and a call seeking comment.
Prime is involved in investment banking, corporate finance, institutional equities and private wealth management. As part of its offshore assets management business, the company also has a registered foreign institutional investor presence in Mauritius.
HOW THE SAGA UNFOLDED
- NSE looks to declare Prime a defaulter
- Prime moves high court for a stay
- Exchange argues show-cause notice yet to be issued
- Show-cause under process
- Terminals disabled, payouts stayed
