The Hindu Business Line : SAT stays SEBI order against depositories, DPs

The Securities and Appellate Tribunal (SAT) on Thursday stayed the disgorgement order issued by the Securities and Exchange Board of India on November 21, 2006, against two depositories — NSDL and CDSL, and eight depository participants.

SEBI had asked these entities to pay up Rs 116 crore, which, the regulator said, they had unjustly gained at the cost of small investors, in the IPO allotment irregularities.

The depositories had appealed to SAT against the SEBI order.

After hearing the appeal, SAT admitted the case and stated that "the issues involved in the appeal require a detailed consideration. Meanwhile the operation of the impugned order will remain stayed."

NSDL's contention was that SEBI had passed the order without granting the accused a proper hearing. Even in the disgorgement order, it was stated that no hearing would be granted to them.

SEBI had asked the accused to pay up the money within six months. This is not justified as the investigation into the case is yet to be completed, it was stated.

The depository participants include Karvy Stock Broking Ltd, HDFC Bank and IDBI Bank.

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