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IL&FS Securities Services moves SAT against Sebi order on Allied Financial

Appearing for IL&FS Securities counsel Gaurav Joshi said there were fraudulent mutual fund transfers carried out by Allied on behalf of its clients Dalmia Cement and OCL India, among others where it was the clearing house.

PTI PTI
Mumbai Published on: May 09, 2019 6:58 IST
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SEBI

IL&FS Securities Services (ISS) Wednesday moved the Securities Appellate Tribunal (SAT) to direct markets regulator Sebi to annul certain transactions carried out by Allied Financial Services.

In February, Sebi had barred Allied Financial and others for misappropriating client securities and a host of other violations.

Appearing for IL&FS Securities counsel Gaurav Joshi said there were fraudulent mutual fund transfers carried out by Allied on behalf of its clients Dalmia Cement and OCL India, among others where it was the clearing house.

He sought SAT's intervention to direct Sebi to annul the said transaction, apart from de-freezing of securities which are stuck following the Sebi order.

In February, the Sebi had barred brokerage Allied Financial, its five directors and four other entities from securities markets for misappropriating client securities and other violations. It had also barred them from disposing of or alienating any assets, or create or invoke any charge on their

assets, without its prior permission.

The Sebi had probed the alleged irregularities at Allied, pursuant to a preliminary inspection by the NSE had found non-availability of client funds worth Rs 94 crore, non-availability of client securities, non-settlement of inactive clients and non-segregation of the transaction between own and client bank accounts.

Replying to the arguments, senior Sebi counsel Rafique Dada said the said requests are untenable, citing provisions in the statutes dealing with contracts, and also informed that OCL and Dalmia have approached the Delhi High Court with a similar prayer for de-freezing certain securities.

A SAT bench comprising Tarun Agarwala, CKG Nair, and MT Joshi reserved the order for May 15. 

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