Stocks

Karvy Stock Broking allays investors fears on defaulting

Our Bureau Chennai/Hyderabad | Updated on November 18, 2019 Published on November 18, 2019

As customers complaint of not getting payments on time

Investors have accused Karvy Stock Broking of not honouring fund transfer on their transactions. BusinessLine spoke to a number of investors and, according to them, the Hyderabad-based financial services firm, is not paying the funds to them for the shares they sold on time.

The broking firm on Monday said that it is honouring all commitments.

Paul (name changed) said that the broking house is yet to pay the amount for the shares he sold in September-October. Online communication system of Karvy Stock Broking is not registering our fund transfer request, said Paul, a Chennai-based investor.

"As the local office is not helpful, I contacted the head office in Hyderabad. Initially, the staff said it is not due to fund issue but may be due to a 'technical issue' the messages might have got stuck. On persevering, the staff admitted there is a fund issue and everything would be settled slowly in a ‘reasonable’ time. But, I am yet to receive my funds,” Paul added.

It has been reported that the firm is facing a financial crunch as some of its clients faced heavy losses in castor seed futures, for which Karvy stands guarantee.

Castor seed not to impact stocks trading

When contacted, Karvy Stock Broking said the castor seed contracts and trading in castor seed by clients is undertaken in Karvy Comtrade, and not in Karvy Stock Broking.

“The exposure that our clients have had in the castor seeds is not much, and most amounts have been collected and settled from the clients. The amount yet to be collected is around ₹5 crore, and for the Karvy group, this is not a significant amount. We are confident of this amount too”. It further said: “The payments to all our clients, wherever there are clear balances, have been affected on time”.

However, it admitted that “in view of the large number of clients that we deal with, there are bound to be a few delays of insignificant amounts, and these are also addressed on a priority basis”.

“We have recently noticed that there were instances of payout issues posted on Twitter by our customers. Most of the impacted customers have been contacted and the issue has been addressed and those who have any issues may contact us on 040- 33216400,” it further stated.

Published on November 18, 2019
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