TIL Desk/Business/New Delhi/ The Securities Appellate Tribunal (SAT) has quashed a Sebi order against HDFC Bank, whereby the regulator had imposed a penalty of Rs 1 crore on the lender in a case pertaining to invoking securities pledged by stockbroker BRH Wealth Kreators. In addition, the regulator had directed to transfer Rs 158.68 crore along with seven per cent interest per annum into an escrow account till the issue of settlement of clients’ securities is reconciled.
These directions were issued by Sebi in January 2021 as HDFC Bank invoked securities pledged by BRH Wealth Kreators in violation of the regulator’s interim order passed in October 2019. Following the Sebi’s order, HDFC Bank moved to SAT. In its order on Friday, SAT said the bank was justified in invoking the pledge made by the broker BRH. While invoking the pledge the bank did not violate any direction contained in Sebi’s interim order.
“The appellant (HDFC Bank) could invoke the pledge under Depositories Act and is not required to approach any forum or Court of law for invocation of the pledge. “The assets of the broker do not include pledge of the shares created by the sub-broker,” SAT said. The tribunal noted that the pledge was created by the broker BRH under the Depositories Act in favour of HDFC Bank.
