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The Congress said in the Rajya Sabha on Tuesday that steps being taken by multiple regulatory authorities in cases related to alleged fraud at Karvy Stock Broking (KSBL) and DHFL could be “legally questionable” and the government should work with regulators to fix the problem.
Karvy is under regulatory lens for allegedly misusing securities of over 95,000 clients which it was holding to raise over ₹600 crore in loans.
Debt-ridden mortgage firm DHFL, through layers of shell companies, has allegedly siphoned off ₹31,000 crore out of total bank loans of ₹97,000 crore.
Raising the issue during Zero Hour in the Upper House, Congress member MV Rajeev Gowda said, “We have had crisis created at KSBL and we have also seen similar activities with DHFL. ...At a time we want to draw more investment, we are seeing a situation where people are turned off from the market. It is important for regulatory authorities to pro- actively fix these problems.”
Instead, multiple regulatory authorities are jumping in and taking pre-emptive measures, he said and added, “They may be urgent measures but legally questionable. This is another problem.”
If these cases get struck in litigation, getting access to funds will become a real problem for customers, he said.
“I urge the government to work with regulatory authorities to help fix these problems and ensure that customers and investors’ interest is not hurt. Need of the hour is to revive investors’ sentiment,” he added.
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