SEBI`s disgorgement order in IPO scam stayed by SAT

SEBI`s first-ever disgorgement order directing 10 entities, including depositories NSDL and CDSL, to pay about Rs 115.81 crore for their role in the IPO multiple demat scam, has been stayed by the Securities Appellate Tribunal.

Besides NSDL and CDSL, other eight entities were depository participants.

Admitting the appeal by the ten affected entities, Justice N K Sodhi, presiding officer, SAT, said, "After detailed consideration in the disgorgement order, the operational part of the order has to be stayed. "I find it to be a unique and strange order where quantum of penalty has been determined even before the enquiry has been completed."

In short 10 entities named in Sebi's disgorgement order will be fighting on the grounds of 'no disgorgement if there's no final order' in the Securities Appelate Tribunal.

The disgorgement was based on Sebi's 'interim ex-parte' order and since a final order on that is still not out, these participants are questioning the validity of the disgorgement order.

The list of the appellants includes, NSDL, CDSL, HDFC Bank, ING Vysya Bank, IDBI Bank, Karvy Stock Broking, Khandwala Integrated Financial Services, Kartik Stock Vision, Pravin Ratilal Shares & Stock Brokers and Jhaveri Securities. The appeals of all these players will be heard together in a single case.

Sebi's digorgement order had asked NSDL and its seven DPs had to pay about Rs90 crore and CDSL and two of its participants about Rs25 crore.

Individually, Karvy was asked to pay Rs51 crore, NSDL Rs45 crore, CDSL Rs12 crore HDFC Bank Rs1.6 crore, IDBI Bank Rs85.88 lakh and ING Vysysa Bank Rs55.48 lakh.