Date:10/05/2006 URL: http://www.thehindubusinessline.com/2006/05/10/stories/2006051005030900.htm

Back SEBI gives personal hearing to Karvy

C.R. Sukumar

It said to have told the regulator that the real problem lay in the system

Coming clean
Karvy admitted to certain lapses, but said there was no mala fide intent behind it.

Hyderabad , May 9

Twelve days after passing ex parte interim orders barring Karvy from operating in the capital market for alleged involvement in the IPO scam, the SEBI gave the opportunity of personal hearing to the company on Tuesday.

According to sources, Karvy used the three-hour hearing opportunity to put forth its arguments refuting all the allegations levelled against it in the SEBI interim orders.

Admitting certain lapses in two of its branches (Ahmedabad and Mumbai) with regard to know-your-client norms that lead to fake DP accounts, Karvy is learnt to have submitted that there was absolutely no mala fide intent behind it.

Karvy is also said to have told the market regulator that the real problem lay in the system and favoured reforms in that direction.

SEBI is expected to complete the exercise of giving personal hearing to all the entities named in its interim orders so that the final orders could be announced at the earliest.

On April 27 the market regulator had barred 24 market intermediaries, including Karvy and Indiabulls, from carrying on certain capital market activities holding them responsible for perpetrating the IPO scam.

Giving a personal hearing to Indiabulls on April 28, the SEBI announced that it would keep in abeyance its order against the company.

The regulator directed the aggrieved parties to submit their responses within 15 days from the date of passing interim orders.