Hyderabad: Justice A. Rajasheker Reddy of the Telangana High Court on Wednesday dismissed the pleas of Karvy Stock Broking Ltd, which challenged the decision of the Ministry of Corporate Affairs in ordering a probe by the Serious Fraud Investigation Office (SFIO) into the company's alleged financial irregularities.
Karvy was seeking a direction to the SFIO not take any coercive steps against the management of the company.
Following the orders of the ministry, the SFIO had issued notices to the firm on June 16 and 19 this year in contravention to provisions of the Companies Act, 2013. The petitioner’s company sought a stay order on the notices.
Taking into consideration of the arguments of the assistant solicitor general, N. Rajeshwar Rao, who had submitted that the action of the company affected the interests of over 93,133 depositors, the judge rejected Karvy’s pleas. The primary investigation into the issue of Karvy ltd. proved that the company indulged in financial irregularities and in spite of several debts, the company transferred around `425 crore to the realty sector.
The Centre directed the probe based on the report submitted by the Registrar of Companies (ROC).