Citing that the depository participant "has already undergone such prohibition for 18 months and 26 days", Sebi has decided not to impose any further penalty.
Karvy Stock Broking, in a late evening statement, said there are no further restrictions on the Depository Participant operations of Karvy Stock Broking Ltd, as the company has already undergone the prohibition stipulated under the order.
"Hence there will be no disruption in the normal functioning of the company. Over the last few years, Karvy has beefed up its systems and processes to prevent such situations in future," the firm said.
The Securities and Exchange Board of India (Sebi), in its order on Tuesday, said the, "acts and conduct of Karvy Stock Broking DP are unfair and fraudulent" within the scope of regulations.
Sebi said the entity is liable to be prohibited from taking up any new assignment for a period of 18 months for its involvement in IPO irregularities.
However, the regulator said that Karvy Stock Broking DP has already undergone such prohibition for 18 months and 26 days.
"In view of the same, there need not be any further penalty," the order said.
Sebi said while Karvy DP had tried to distance itself from the activities of the other Karvy group entities and the key operators in the IPO scam, tt was clear that all of them had acted in concert and facilitated cornering of the shares.
"I note that the Karvy group as a whole appeared to have favoured an extremely aggressive approach to business leading to their direct involvement in the IPO manipulation," Sebi Whole Time Member Prashant Saran said in the order.
"Even if, I were to accept the said submission of Karvy Stock Broking, the fact that would remain is that it had turned a blind eye to the unusual situation where names and surnames appear in hundreds of accounts with mathematical regularity and points to much more than merely not exercising proper diligence and prudence," he added.
Pursuant to a preliminary enquiry, Sebi in June 2007 had passed a common order in respect of all Karvy entities, including Karvy Stock Broking DP. In the order, Sebi had barred the depository participant from opening fresh demat accounts.


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