The Hyderabad bench of the National Company Law Tribunal (NCLT) on February 8 ordered the management of scam-hit Karvy Stock Broking not to alienate any assets of the company and its subsidiaries, responding to an application filed by a minority shareholder.
This comes amid ongoing investigations by various agencies including the police, Securities and Exchange Board of India, Serious Fraud Investigation Office and Enforcement Directorate (ED) into a host of allegations against the company and weeks after the ED took Karvy group chairman and managing director Comandur Parthasarathy and group chief financial officer G Krishna Hari into custody.
The NCLT bench of judicial member Bhaskara Pantula Mohan and technical member Binod Kumar Sinha issued the restraining orders in response to a petition filed by Meka Rajini, a minority shareholder of Karvy Stock Broking.
Rajini brought to the notice of the tribunal that Karvy was indulging in selling assets and not properly accounting for the proceeds, which the petition said could severely jeopardize the interests of shareholders.
The tribunal in its orders directed Karvy Stock Broking “from alienating any assets (inclusive of both current assets and fixed assets) of the company”.
The NCLT bench also asked the company to bring to its notice any payments to be made to the investors or any other statutory agencies and “seek permission of the bench and only on a case-to-case basis this bench may allow the sale of the assets”.
Responding to the submission of the minority shareholder that the company was also indulging in the selling assets of its subsidiary companies, the bench ordered Karvy Stock Broking not to “use its majority holding in its subsidiaries to take any decision for selling away the assets”.
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