Two more arrested in Karvy case

Hyderabad: The Central Crime Station police on Thursday arrested two more persons in connection with the Karvy Stock Broking Private Limited case. The arrested persons were Rajiv Ranjan Singh (52), chief operating officer and G Krishna Hari (63), chief financial officer working for the firm at Hyderabad. A case was registered against the company following […]

Hyderabad: The Central Crime Station police on Thursday arrested two more persons in connection with the Karvy Stock Broking Private Limited case.

The arrested persons were Rajiv Ranjan Singh (52), chief operating officer and G Krishna Hari (63), chief financial officer working for the firm at Hyderabad.

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A case was registered against the company following a complaint made by the vice president of IndusInd Bank last week following allegation of availing credit facilities of Rs 137 crores from the IndusInd Bank after pledging securities/shares and personal guarantee fraudulently. The CCS police had booked a case under Section 406, 420,409, 421, 422, 120(B) r/w 34 of IPC and arrested C Parthasarathy, chairman and managing director of the firm, after it was found that he suppressed the fact that the pledged securities belonged to the clients and were presented as collateral without their consent.

“The securities were transferred into Demat account of KSBL and pledged before IndusInd bank for margin and short term requirement in the business of KSBL from March 1, 2013. The accused company became defaulter by diverting the funds into own and connected businesses entities and on November 11, 2019 the SEBI revoked the pledge of securities with Banks/NBFCs and returned the securities/accounts. The complaint bank was left with no collateral and thereby KSBL defaulted in repayments of about Rs 137 crores as on March 31, 2021,” Avinash Mohanty, Joint Commissioner of Police, Detective Department said.

The police took custody of Parthasarathy twice and during investigation found that Rajiv Ranjan Singh, who is incharge for trading and broking, executed trading in nine other companies trading accounts from 2014 to 2019 and Krishna Hari diverted funds which were raised from banks by pledging client securities as collateral to nine shell companies as per oral instructions of Parthasarathy. It was done to show huge turnover and market share of KSBL in Stock Market and caused huge loss of Rs 300 crores which was shown as book debts, the police said.

The two persons were produced before court. The CCS police have booked four different cases in this connection and are investigating.