HDFC Bank turns down BMA clients' plea to return shares

HDFC Bank has turned down a request by investors to return their shares which were fraudulently pledged by suspended brokering house BMA Wealth Creators.

The hapless clients of BMA had asked HDFC Bank to return the shares to their depository participant (DP) accounts.IANS photo.

HDFC Bank has turned down a request by investors to return their shares which were fraudulently pledged by suspended brokering house BMA Wealth Creators.

The hapless clients of BMA had asked HDFC Bank to return the shares to their depository participant (DP) accounts.

In a letter addressed to BMA's clients, HDFC Bank said that it was well within its legal rights to sell shares pledged by the brokerage under the loan agreements. It further claimed that BMA had "expressly represented" that it owned the shares pledged.

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Markets regulator Sebi had on January 2 given confirmation to its interim order barring stock broker BRH Wealth Kreators Ltd and seven entities, including three individuals, from the securities market. BRH Wealth Kreators was formerly known as BMA Wealth Creators Ltd.

Besides BRH Wealth, Shiv Kumar Damani, Anubhav Bhatter, Murgesh Devashrayi, BRH Commodities Pvt Ltd -- formerly BMA Commodities Pvt Ltd -- Prosperous Vyapaar Pvt Ltd, PoloSetco Tie Up Pvt Ltd and Parton Commercial Pvt Ltd had also been restrained from accessing the securities market.

"Stock exchanges (BSE and NSE) are directed to take further necessary action against the member i.e. BMA, in accordance with their bye-laws," Sebi said.

BRH Wealth Kreators (formerly BMA Wealth Creators) and its promoters have been barred from the stock market following the National Stock Exchange investigation found that misappropriation of Rs 100 crore from client accounts by the broking firm.

According to Sebi, it had received an e-mail on September 26 last year from the NSE, saying that it had observed significant mismatches and inconsistencies in the balances reported by BMA.

"A shortfall of around Rs 100 crore worth of client securities was observed as compared to the actual DP record as on August 30, 2019," Sebi said.

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