The total dues payable by Sebi to the lenders, which also include HDFC Bank, IndusInd Bank, ICICI Bank and Bajaj Finance, was around ₹2,300 crore.
A Supreme Court bench, led by Chief Justice DY Chandrachud, while admitting a batch of appeals filed by Sebi, National Securities Depositories (NSDL) and National Stock Exchange of India (NSE), posted the matter for final hearing in the second week of April.
It also asked the parties concerned to maintain status quo with regard to the shares of Axis Bank and also said that it will pass interim orders in respect of other lenders on Monday.
So far, no relief has been given to NSDL and NSE, which argued that no liability can be imposed on them as they were only following Sebi’s directions. Sebi, NSDL and NSE had moved the Supreme Court against the Securities Appellate Tribunal’s (SAT) December 20 decision that quashed the market regulator’s orders of December 13, 2019 and January 14, 2020. Sebi had restricted lenders, including Axis Bank, HDFC Bank and ICICI Bank, from revoking the shares pledged by Karvy and permitted Axis Bank to invoke the shares pledged in its favour.
SAT also directed the market regulator, NSE and NSDL to restore the pledges made in favour of the lenders within four weeks or alternatively, Sebi, the stock exchange and depositories to “compensate” the lenders with the value of the underlined securities pledged in their favour by Karvy with 10% interest per year.
While Sebi’s senior counsel Arvind Datar and counsel Amarjit Singh Bedi sought stay of the SAT’s December order, senior counsel AM Singhvi and others, appearing for banks, opposed any stay, arguing pledges were lying with them since 2003 and Sebi had asked the lenders to freeze them. Singhvi also insisted that NSE and NSDL should pay ₹450 crore as directed by SAT.
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