Karvy investors are urged by SEBI to submit claims; Deadline is June 2

Market regulator SEBI on Friday directed investors of defaulting Karvy Stock Broking Limited (KSBL) to submit their claims by the June 2 cutoff date. KSBL was declared a defaulter by the National Stock Exchange (NSE) on 23 November 2020. Investors were later asked to submit claims against the defaulting broker, with the cutoff date being fixed for June 2, 2025.

SEBI said in its statement, "As the deadline for submission of claims by investors against the defaulting broker Karvy Stock Broking Limited is approaching, investors are advised to take note of the above deadline and are urged to submit the claim before the deadline if they have not submitted the claim yet." For assistance, investors can contact NSE by calling its toll-free number 1800 266 0050 (select IVR option 5) or by emailing at defaultisc@nse.co.in.

In April 2023, SEBI had banned KSBL and its CMD C Parthasarathy from the securities market for seven years. He was also fined Rs 21 crore for misappropriating clients' funds by misusing the power of attorney given to the broking firm.

This action has been taken after a massive asset-raising drive on the part of KSBL. The company raised huge amounts of money from financial institutions. The brokerage firm did this by pledging clients' securities - secured through power of attorney given to KSBL.

However, instead of fulfilling these commitments, the funds were misappropriated and transferred to entities linked to KSBL, resulting in default in settlement of client securities and funds, in violation of regulatory norms.