Lenders of Karvy Stock Broking have moved the Debt Recovery Tribunal (DRT) in a bid to recover loans extended to the broker, sources have told Moneycontrol.
The lenders are hoping to recover money from Karvy by seeking the sale of broker’s assets which is pledged with bankers by the DRT. A source close to development told Moneycontrol, "Karvy's promoters pledged their own stake and other assets which are around worth of Rs 5,000 crore."
The DRT comes under the ambit of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002, which allows banks and other financial institutions to auction assets to recover bad loans.
The Karvy case came to light after it emerged that it had pledged securities of its clients to raise as much as Rs 2,300 crore by passing them off as its own.
Bajaj Finance, ICICI Bank, HDFC Bank, IndusInd Bank and Axis Bank, with loans of Rs 345 crore, Rs 700 crore, Rs 208.5 crore, Rs 159.6 crore and Rs 81 crore respectively, are among the lenders.
On December 2, 93 percent of Karvy’s clients whose securities had been pledged got back their securities after SEBI ordered the depository to carry out the order.
Lenders who claimed the right to the securities then sought the intervention of the Securities Appellate Tribunal (SAT), which refused to order a reversal but halted any further transfer.
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