Karvy Investor Services (KISL) had its merchant banker licence revoked by the Securities and Exchange Board of India (Sebi) due to noncompliance with eligibility requirements.
The order came after Sebi conducted an inspection of Karvy Investor Services during March 15-17, 2023 and in the onsite inspection, the regulator found that the merchant banker was not functioning or operational both at the registered as well as in the correspondence address.
The regulator carried on with its inspection and found that Karvy Investor Services did not have the required infrastructure.
"...by not having necessary infrastructure like adequate office space, equipment etc. and minimum two employees having the experience to conduct the business of merchant banker and having a director who is involved in a litigation connected with the securities market which has an adverse bearing on the business of the applicant and by not being fit and proper person, noticee (KISL) is not meeting eligibility criteria as laid down in....merchant bankers Regulations," SEBI said in its 24-page order.
It is also revealed that from December 13, 2022, to December 12, 2025, Karvy Investor Services has not paid the renewal fee.
Accordingly, the regulator has cancelled "the certificate of registration...of Karvy Investor Services Ltd". The order comes into force with immediate effect.
SEBI prohibited Karvy Investor Services in April 2023 from taking new clients for allegedly violating regulatory norms. The market regulator uncovered that the company neither has any physical infrastructure nor any employees working for it.
Karvy Investor Services was registered as a merchant banker with SEBI in December 2013.
