Mumbai: A day after it barred 24 market players from trading in the capital market for involvement in the multi-crore IPO scam, SEBI on Friday gave temporary relief to one of them - Indiabulls Financial Services.
The regulator kept the ban on Indiabulls in abeyance pending verification of clients' accounts - a decision that helped the stock market shrug off initial panic over the ban and recover the 491 points it had lost during the day.
Sebi, however, said investigation into the scam was on. "Nothing (investigation) is over. If new facts emerge, we are open to investigation," Sebi Chairman M Damodaran said.
Karvy Stock Broking Ltd, which is facing the regulator's heat for having handled 95 per cent of the fictitious accounts created for cornering the retail quota in IPOs between 2003 -- 05, termed the ban as 'very harsh'.
But Indiabulls, in whose credit services business steel tycoon L N Mittal picked 8.2 per cent stake last month, was the first to approach the regulator, challenging the ban.
In its submission, the company said: "Indiabulls Securities Ltd or any of its group companies had absolutely no role in either the IPO application of these 559 clients or any economic interest or any other interest whatsoever in the sale proceeds arising out of the sale of 13,939 shares or any financing of any of the IPO applications of the 559 clients."
Indiabulls was the first to approach the regulator, Damodaran said, adding the affected brokers have 15 days time to respond to the interim order.
Sebi would not hesitate in hearing petitions from other aggrieved parties, if they approach us, he said.
Karvy, had closed 65,000 of its nearly 8 lakh accounts due to their suspicious nature, said: "We will...(be) filing our objections."
Earlier in the day, Sebi had clarified that it had barred the 24 brokerage firms only from trading in proprietary accounts and they can still trade on behalf of their clients.
Giving relief to retail investors, market regulator Sebi said transactions carried out by barred market players on behalf of their clients will not be affected by the ban.
Besides Karvy and IndiaBulls, Sebi has banned 22 other market operators from operating in the market in view of their alleged role in the IPO scam that came into light in the middle of December last year.
Sebi has also asked 12 depository participants (DP) not to open fresh demat accounts, and these included HDFC Bank, IL and FS and IDBI Bank, among others. The stock market watchdog had also asked NSDL to inspect books of 15 DPs.
Sebi's Thursday Order on Demat
> Indiabulls Securities, Karvy Stock Broking barred from market
> 12 Depository Participants told not to open fresh accounts
> 85 financiers of key operators barred from market
> 24 key operators barred from market for indulging in abusive practices in 21 IPOs
> 58,938 DP accounts used to corner retail portion of IPO
> Sebi report covers 105 IPOs from 2003-2005
> Sebi bars Anagram securities from participating in markets
> Sebi orders Karvy, Pratik DPs to stop DP activities till final order
> IL&FS, Motilal Oswal Sec, Khandwala not to open fresh demat accounts
> HDFC Bank, IDBI Bank, ING Vysya Bank, CBoP also not to open fresh demat accounts
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