Mumbai: The Bombay High Court has led SBI Capital Market and KPMG to value Karvy Stock Broking’s demat and trading accounts after the firm challenged the recent move by National Protection Depository( NSDL) and Central Depository Assistance( CDSL) to sell them separately.The beleaguered Karvy Group suggested in its plea that the acquisition of the demat accounts and trading chronicles of its broking forearm “shouldve been” retrieved at least Rs 816 crore. However, the depositories sold them at a’ throwaway’ price of Rs 140 crore considering the volume of the accounts and incarceration value of the demat and trading accountings, it said.IIFL Protection had won the bid to acquire the 11 lakh demat chronicles held by Karvy. Axis Defence surfaced as the successful bidder for Karvy’s trading histories. This was the first time depositories separately sold trading and demat notes. Exchanges had terminated the membership of Karvy amid accusations the brokerage had ill-use clients’ protections and monies. 8168053 8The disagreement bench of Justice AA Sayed and Justice Madhav Jamdar has asked SBI Caps and KPMG to submit separate valuation reports on the valuation of the demat accounts and trading accounts.“This is the first time such a situation has arisen and there is no earlier precedent where bids have been invited for the acquisition of the demat histories/ trading accountings of a Depository Participant/ Trading Member who has been ostracized/ started, ” said the court in its 33 -page order of March 18. “To satisfy our judicial conscience, we are inclined to call for valuation report/ s notwithstanding the contention of the respondents that the said demat accounts and trading notes cannot be valued.”The valuers will have to submit their report to the court before the next year of hearing. The tribunal has announced the hearing on May 3. Karvy has also made the National Stock Exchange( NSE ), BSE and Metropolitan Stock Exchange of India( MSEIL) respondents in the case.Karvy’s polemic has been that that the bidding process to buyout the demat and trading chronicles was’ arbitrary’ and faced a “serious issue of credibility”.Lawyers of NSDL and CDSL argued that the part bidding process was fair and transparent and that the valuation method sought by Karvy to value its notes would not be applicable in this case.The court also find the decision of the exchanges and the depositories to undertake the process of nomination of another trading member or depository participant in place of Karvy cannot be faulted.“Their action was only to protect the interest of the clients of KSBL, whose interest is paramount, ” find the court, while refuse Karvy’s plea to restrain respondents from accomplishing or proving the process of transferring the demat and trading acccounts to IIFL and Axis Securities.Vikram Nankani, Senior Counsel performed for Karvy, while CDSL and NSDL were represented by Senior Advocate Zal Andhayarujina and Somasekhar Sundaresan respectively.

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