sebi:WTM/KMA/IVD/211/01/2010
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Facts / Headnote
Directions issued constituting a Committee of NSE and BSE chaired by an independent expert to identify owners and release securities to clients; brokers directed to reconcile client-wise securities position and recreate securities register; MIRSD directed to conduct urgent inspection.
Provisions invoked
- s. 19
Parties
- Alka Securities Limited
- Mahesh Kothari Shares and Stock Brokers Private Limited
Holding
SEBI held that the auditor's reports by Deloitte Haskins & Sells were incomplete and insufficient to ascertain ownership of securities held in the beneficiary accounts of Alka Securities Limited and Mahesh Kothari Shares and Stock Brokers Private Limited, and therefore no directions could be issued for transfer of such securities based on those reports alone. Instead, an alternate mechanism — a Committee constituted by NSE and BSE chaired by an independent expert — was directed to be set up to identify owners and release securities to clients.
Full text
Page 2 of 9 think it necessary to issue any directions.” The said period of ten days was subsequently extended upto January 31, 2010 by Hon’ble SAT, vide order dated January 15, 2010, on an application filed by SEBI, for the reasons stated therein.
Page 3 of 9 advised the aforesaid stock brokers to extend their co-operation. SEBI also advised the stock exchanges to co-ordinate with their respective members. The stock brokers, in turn, responded to SEBI indicating that they were making their best efforts to help the auditors to complete the assignment. DHS considered appropriate to follow certain methodologies for identifying the owners for the securities. DHS identified that the aforesaid stock brokers had two beneficiary accounts one each with two Depository Participants (DP), viz, IndusInd Bank and Bank of India. The total scrips in those DP accounts were as under:
Page 4 of 9 (e) For any scrip’s ownership as identified by the broker, if the auditors were not convinced or if it was not found in the trade file identified by the member, the same was ignored and the auditor’s
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Source: SecMarx — sebi:WTM/KMA/IVD/211/01/2010. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.