We will come out clean, says Karvy

New Delhi: Karvy Securities Ltd has been advised to stop opening fresh demat accounts until its present clients are verified by their names and addresses as mentioned in the SEBI order.

In its order, SEBI has asked Karvy Securities to freeze the accounts for all transactions till the clients identify themselves. It has been also asked to take similar action in case of all accounts introduced by the same sub-broker.

Karvy is one of the largest share registrars in India as it services some 22 million investors at present.

The journey of this financial services group began in 1981 when a group of Chartered Accountants founded Karvy Consultants Ltd.

About 60,000 retail investors use Karvy's financial services every day.

The Karvy group has handled big public issues including Reliance Petroleum, and others like TCS, ICICI Bank and Suzlon Energy, worth over Rs 10,000 crore. The company employs 7,000 people and has 500 branches across India.

All though SEBI’s order has left the company and its investor shaken and stirred, yet it is confident to come out of the mess sooner than it is expected.

Reacting to the SEBI mess, Karvy official says, "Should Karvy have acted with a malafide intent or they have been benefited unduly, then they should have received the benefit either by way of shares or funds by way of profit realised on these shares. SEBI has all means to verify whether such benefits have been received and has not identified even a single case of such benefits being accrued. Karvy has not received any undue benefits whatsoever."

Reliance IPO allotments

SEBI's order of barring Karvy as a registrar for new issues will not affect IPO of Reliance Petroleum (RPL).

A SEBI official says, "SEBI order restrains the companies from taking up fresh businesses. The RPL allotments will continue."

Though Karvy has been barred from acting as a registrar for new IPOs, it will not affect RPL IPO, as it has already happened, sources in Reliance Industries told.

In perhaps the largest ever over subscription of a public issue in recent times, Mukesh Ambani-controlled Reliance Petroleum has received share applications for an unprecedented 49.72 times more than the size of its initial public offer.