The Securities Appellate Tribunal on Tuesday cancelled and set aside an order given by the market regulator SEBI, against the National Securities Depository Ltd in the Rs 500-crore IPO scam of DSQ Software.

The controversy in the case related to a fraud unearthed by the Securities and Exchange Board of India at NSDL during 2002-05, when thousands of fake demat accounts were created to corner stocks offered through IPO to retail investors.

Former SEBI chief C.B. Bhave was heading the depository during that period and the scam had put a question mark on Bhave’s role in the murky episode.

In a 26-page order, the Presiding Officer of SAT, J.P. Devadhar, observed that independent probes have revealed that there was no complicity of NSDL with any entity involved in the IPO scam. “Thus, the fact that the appellant (NSDL) has already investigated the matter to ascertain the individual accountability cannot be disputed,” Justice Devadhar said in the order.

The appellate, in the order, has observed that the initial committee set up for conducting the probe had found no fault with the inquiry report of the NSDL dated June 10, 2006 nor has it recorded any reason on the basis of which fresh investigations to fix the individual accountability has been ordered.

“Therefore, in the absence of any cogent reason for rejecting the investigation already carried out, directing fresh investigation is wholly unjustified,” it stated.

“This order, however, will not come in the way of the respondent to seek compliance of any other remedial measures that may be suggested by the respondent with a view to strengthen the Depository system,” Justice Devadhar maintained in the order.

The orders were originally passed by a SEBI committee in December 2008, but were later dismissed as “null and void” by the board of the market regulator as the orders were passed after Bhave took over as SEBI chief.

However, in 2011, the Supreme Court forced the market regulator to revive the matter following which SEBI issued fresh orders directing them to comply with the same within six months.