Karvy Stock Broking MD arrested in Hyderabad

A complaint was lodged by IndusInd Bank Hyderabad vice president against Parthasarathy alleging that he had availed credit facilities of Rs.137 crore from the bank

Hyderabad: The chairman and managing director of Karvy Stock Broking Pvt Ltd, C. Parthasarathy (67), was arrested by the Detective Department of the Hyderabad City Police here on Thursday on charges of cheating the IndusInd Bank, Hyderabad to the tune of Rs.137 crore.

According to the police, a complaint was lodged by IndusInd Bank Hyderabad vice president against Parthasarathy alleging that he had availed credit facilities of Rs.137 crore from the bank by pledging securities/shares and personal guarantee of chairman and MD of Karvy Stock Broking Private Limited.

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“He allegedly suppressed the fact that the pledge securities belonged to the clients and without their consent and misuse of power of attorney were furnished as collaterals. The securities were transferred into the Demat Account of Karvy Stock Broking Private Limited. Later, the company become defaulter by diverting the funds into own and connected businesses, and defaulted the payments of IndusInd Bank,” said Avinash Mohanty, Joint Commissioner of Police, Detective Department Hyderabad.

During investigation, the police found that funds worth Rs.720 crore were also diverted by Parthasarathy. The company also took credit facilities from other banks of around Rs. 680 crore by submitting client securities without their consent and defaulted other payments also, Mohanty said.

The police said two cases were also registered against KSBL and Karvy Commodities Private Limited pertaining to loan fraud of Rs. 340 crore and Rs. 7 crore respectively.

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