Edelweiss Custodial Services Limited has approached the Mumbai High Court for claiming the outstanding dues by IndiaNivesh Securities Private Limited. The matter will be heard tomorrow.
The Mumbai-based brokerage shut down it’s services related to stockbroking amid the credit freeze and unanticipated liquidity crunch in the markets due to the coronavirus outbreak in March this year. IndiaNivesh was a SEBI-registered stocks and commodity broking entity in the business for over 14 years.
In a statement which was filed with the exchanges IndiaNivesh Shares and Securities Private Limited had mentioned that “there has been mark to market losses which has been funded by Edelweiss Custodial Services Limited and Edelweiss Custodial Services Limited was covered with STL which was available for the credit balances of the Clients.” They requested the exchanges to freeze all the collaterals including Bank Guarantees, STL and other amounts available with the Exchange(s) and their clearing member Edelweiss Custodial Services Limited. They stated that the amount would “be enough to cover the Creditors of IndiaNivesh”
The claim of Edelweiss Custodial Services Limited on IndiaNivesh is to the tune of INR 100 crs.
The ongoing coronavirus pandemic, coupled with the lockdown, had led to an unprecedented fall in March 2020. Global rating agencies have also revised India’s growth rate to a dismal 0.2% on a backdrop of extended lockdown which has brought economic activity in the country to a grinding halt. Recently Franklin Templeton AMC also announced winding up six of its debt funds against the backdrop of COVID crisis.
