swati deshpande tnnmumbai the securities appellate tribunal sat on tuesday suspended the transfer of shares from the dp account of karvy stock broking and directed sebis wholetime director to hear bajaj finances grievances which had challenged the regulators shareshift orderwithout commenting on the merit of the case filed by bajaj finance against a november 22 2019 sebi order sat has asked the wholetime director to hear the nbfc on the basis of its representation dated november 23 2019 the sat order was passed by c k g nair and justice m t patil following the sebi order nsdl has so far transferred securities to nearly 83000 clients from the dp account of karvy bajaj finance had on monday approached sat and challenged the sebi order that had directed depositories to transfer shares back to the original shareholders demat accounts in the wake of the karvy scandal the tribunal also directed sebi to hear bajaj finance on any other additional representation which it may like to make such additional representation is to be made by december 4 said sat sebi has to pass orders by december 10 meanwhile sat granted no immediate relief to karvy stock broking against its suspension by the nse though it did not stay the suspension the tribunal ordered karvy be heard by the appellate authority at the nse on the issue and directed that an order be passed by december 6karvy stock broking is alleged to have illegally pledged shares to raise money bajaj finance argued that the company had done its due diligence and hence was not at fault at lending against the pledged securities we find that the impugned order sebis order notes that karvy had raised funds pledging securities from banks and nbfcs and therefore was aware that rights of those entities would be impacted by the order as such even if they could not be heard while passing the impugned order at least on their representation they were entitled to be heard sat saidit is also an undisputed fact that lending against securities is a normal and permitted business activity of banks and nbfcs and sebi is fully aware of the same sat observed the tribunal observed that the sebi order has prejudiced and adversely affected the rights of the appellant bajaj finance as a bona fide lenderbajaj finance through its lawyers janak dwarkadas had contended lending against pledged securities was normal business for it there was an undertaking from karvy stock broking that such pledged securities were owned by karvy itself and were not from clients accounts the order noted that dwarkadas had also argued that given the increasingly tightened regulatory approach to this issue bajaj finance had no reason to doubt the pledges made by karvy for obtaining loans because the standard operating procedure for such accounts and securities was rigorous and monitored by depositories exchanges and above all sebidwarkadas said bajaj finance would be unsecured up to rs 344 crore due to sebis order for sebi rafique dada