Hyderabad: Investors warm up to the idea of suing Karvy group

Hyderabad: Karvy investors from the city seem to be waking up to the idea of taking the brokerage firm to the courts. They are making calls to their lawyers to explore the idea of filing a case against Karvy. A lawyer who was contacted by multiple people on the subject said it would take less than 20 people to come together to file a joint case so as to make a considerable impact.

It may be recalled that Deccan Chronicle had, in its January 9 (Thursday) edition, published an article on the Karvy investors who have been unable to control their shares since November. Karvy has been accused of misusing client faith by pledging their shares and securities as collateral for loans. The Securities and Exchange Board of India (SEBI) had on November 22 blocked Karvy from accepting new customers and purchasing shares in delivery.

Columnist and economist Mohan Guruswamy was quoted in this article expressing his dismay over how Karvy management had not contacted him to update him about the matter so far. Guruswamy and his wife own shares worth a considerable amount which are blocked with Karvy.

On Thursday, a senior executive in Karvy management contacted Mr Guruswamy, wishing to explain to him “personally” that his money was safe. “They said they would take care of all my problems. They were very polite and said they would sort everything out,” he added about his conversation with Karvy management.

Guruswamy felt more aggrieved parties needed to come together to put collective parties on all stakeholders, especially SEBI. “It is, ultimately, SEBI that needs to act. If more people come together, they can make SEBI get up and take notice,” he said.

Indeed, Karvy investors seem to be waking up to this idea. A senior lawyer, who wished to remain anonymous, said he had received several calls from customers wanting to take legal action against Karvy.

“Ideally, we need 20 people to come together for a joint case. Even 10 will do initially. I believe many investors are intimidated by senior executives within Karvy. They are afraid of taking them on. I don't think there is anything to be afraid of. I am hoping more people will come forward in the next few days so we can proceed with a proper suit,” he said. Investors who have lost money or have their shares locked because of this Karvy scandal can send a mail to dcforkarvyinvestors@gmail.com.