Karvy sets deadline of Feb 15 to pay clients’ dues

Mumbai: Troubled

Karvy

Stock Broking has set a February 15 deadline to pay all its dues to clients, which includes stocks and funds worth several crores of rupees. With a new man at the helm, the brokerage house is also going in for a restructuring of its financial services business and there are rumours that this may include sale of some assets and subsidiaries.

In the last few days, Karvy Group chairman

C Parthasarathy

has written to some of the clients — who are waiting to get money and/or stocks from the broking house — that all their claims will be settled by February 15. On the other hand, some other investors, also awaiting funds and securities for months, have been told by the company’s staff that their claims will be settled by February 6.

To a query from TOI, a spokesperson for the broking house said that it was “arranging the necessary funds” and “plans to complete customer payouts in the next few weeks”. Karvy is also in the process of restructuring its financial services business and “will ensure all commitments are fulfilled”.

Last November, Sebi had passed an ex-parte order against Karvy Stock Broking taking on new customers after illegally using its clients’ stocks to pledge with banks to get money, and then funnelling that money into its other group companies. Subsequently, NSE and BSE had banned the stock broker from the markets.Some of Karvy’s large investors who are still stuck for funds and securities, however, believe that meeting the February 15 deadline could be difficult, given the current market situation. Also, they pointed out that over the last several months, Karvy has been promising payouts to its clients but has been deferring the same. On the positive side, some clients have been receiving stocks in their accounts as full or partial settlement of their dues from the Hyderabad-based broking house.


Stay ahead in business with The Times of India. Check out Financial Calculators like SIP, PPF, FD, NPS and Mutual Fund Calculators.