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Geojit publishes inspection reports on website to reassure investors

Rajesh Kurup Mumbai | Updated on December 05, 2019 Published on December 05, 2019

Company says no negative observations by regulators

In its attempt to reassure investors following the Karvy crisis, Geojit Financial Services has decided to publish on its website the findings of inspections conducted by regulators.

To begin with, the Kochi-headquartered financial services firm has began publishing the results of inspection of its account books and other documents. These include verification of cash and CDX segments for various periods, sources close to the development told BusinessLine.

In a recent posting, the company also said there were “no negative observations” by regulators including SEBI, BSE and NSE.

In November, SEBI banned Karvy Stock Broking for client defaults of about Rs 2,000 crore, making it one of India’s largest cases of equity broker default. In an ex-parte interim order, SEBI banned Karvy from not only taking new clients but also from executing trades for its current clients.

In a mail to clients, Geojit Managing Director CJ George said the company is not under any investigation from SEBI. The letter has been issued in the backdrop of the Karvy issue, he added.

“In order to avoid any anxiety among investors and clients, I would like to reassure you that Geojit places utmost importance on the trust you have in us. The Power of Attorney (POA) given to us by you is a specific POA. This is used only for the purpose of transfer of securities towards your Stock Exchange-related margin, delivery or settlement obligations. We do not use your POA for any other purposes than these,” it said.

“We have always been a zero debt company and have never pledged our clients’ securities for loan from any bank, even before it became a regulation, as a matter of internal discipline,” it added.

Geojit, according to the letter, has more than Rs 38,000 crore of assets under and management (AUM), of which about Rs 32,000 crore are in DP. More than 95 per cent of Geojit’s consolidated income comes from capital markets including mutual funds, and insurance distribution.

The company’s “sole focus” is on capital markets and does not have any other business apart from a “modest software business”, it added.

Earlier this week, New York-headquartered PE firm General Atlantic changed the name of its portfolio company Karvy Fintech to KFinTech, distancing itself from the Karvy crisis.

Published on December 05, 2019
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