Karvy chairman held for bank loan default case

Scamhit Karvy Stock Broking Limited Chairman C Parthasarathy was arrested here on Thursday on charges of defaulting a bank loan police saidParthasarathy was arrested for defaulting on a loan taken from the IndusIndbank and diverting the fund to other bank accounts Avinash Mohanty Joint Commissioner of Police Detective Department saidThe banks in their complaint alleged that Karvy group represented by Parthasarathy unlawfully pledged the shares of its clients and availed loans The loan amounts have been diverted to other firms and subsequently defaulted on repayment the official addedAccording to the complaint filed by IndusInd Bank Karvy availed credit facilities of Rs 137 crore from the bank by pledging securitiesshares and personal guarantee of Parthasarathy without the clients consent and by misusing power of attorneyThe accused company became defaulter by diverting the funds into own and connected businesses entities and on November 22 2019 the SEBI revoked the pledge of securities with BanksNBFCs and returned the securitiesaccounts The complaint banks were left with no collateral and thereby KSBL defaulted in repayments of about Rs 137 Crores as on March 31 2021 a press release from the police saidFurther investigation revealed that the accused also diverted the Rs 720 crore of clients funds which are lying in the bank accounts linked to their trading account and Karvy is also learnt to have taken credit facilities from several other banksNBFCs to the tune of about Rs 680 crores by pledging client securities without their consent and defaulted further repayment the release saidTwo cases based on complaints from the HDFC bank have also been registered against KSBL and Karvy commodities pertaining to loan frauds amounting to Rs 340 crore and Rs seven crore it addedIn November 2019 SEBI barred KSBL from taking new brokerage clients after it was found that the brokerage firm had allegedly misused clients securities to the tune of over Rs 2000 crore In November 2020 Bombay Stock Exchange declared Karvy Stock Broking as a defaulter and removed the brokerage house from its membership after a similar action was initiated by the National Stock ExchangeThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever