Beleaguered stockbroker Karvy will clear its obligations towards lenders and clients by the first week of March, SEBI chairman Ajay Tyagi told reporters today.
The broker is selling real estate to clear its dues, Tyagi said.
Karvy defaulted on its obligations after incurring losses on trades it had carried out by illegally pledging client securities. The broker’s act of passing off client securities as its own came to light after SEBI issued a circular in June last year, mandating that the two be distinguished.
The broker had defaulted to the tune of about Rs 2,300 crore. While about 90 percent of Karvy’s clients got back their securities after SEBI passed an order, the broker still owes about Rs 1,189 crore, to lenders and some unpaid clients.
Of the amount still owed, Rs 694 crore is in the form of securities and Rs 495 crore in funds. Further, Karvy currently only has Rs 511 crore, leading to a shortfall of Rs 678 crore. The Rs 678 crore shortfall is in the form of funds (Rs 495 crore) and securities (Rs 183 crore).
Moneycontrol was first publication to report on Karvy’s default.
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