Hyderabad: Less than two years after the Market Regulator Securities & Exchange Board of India (SEBI) prohibits Broking companies based on Hyderabad Karvy Stock Broking Ltd (KSBL) to ag for illegal client securities to increase loans against shares and KSBL implementing director Catch KSBL C Parthasarathy on Thursday based on the default complaints of loans by Indusind Bank.
Two months ago, the bank has registered KSBL Sagainst Fir – which is the top Indian intermediary company until 2019 – accused him of default on loan Rs 137 Crore by promising his client’s securities.
Parthasarathy was arrested on charges of cheating, fraud, and criminal violations of trust under various parts of Indian Criminal Code.
The boss of the Karvy Group was then produced before the Nampally Criminal Court, which returned it up to 14 days of the judge’s guard.
Police officials said that in addition to investigating the default KSBL loan to the bank, they also investigated the alleged parthasarathy which was misused by client funds with the 720 Crore RS tone parked on the KSBL trading account.
The Hyderabad police investigation team relied on the details of the 2019 peer order that prohibited KSBL from broking activity based on initial investigation by the national stock exchange.
Police Commissioner Hyderabad Anjani Kumar told MediaSperson that Parthasarathy was arrested under section 406 (criminal violations of trust), 420 (cheating), 418 (cheating on the knowledge that incorrect losses can occur in unbound people), 421 (dishonest or removal or concealment of cheat property to prevent distribution between creditors), 422 (dishonest or debt prevention is available for creditors), 409 (criminal violations of trust by civil servants, or by bankers, traders or agents) and 120B (conspiracy) IPC .
Avinash Mohanty, Commissioner with Police (Department of Detective), Police Hyderabad, said the case was registered based on the complaints of Bank Indusind accused that the KSBL utilizes a credit facility of Rs 137 Crore, along with personal guarantees from Parthasarathy, by suppressing the fact that the guaranteed securities belong to KSBL clients .
“Without the consent (client), he abuses the power of lawyers (given by clients to KSBL for trading purposes),” Mohanty said.
KSBL, which allegedly transferred his client’s securities into his own Demat account and promised them to banks such as Indusind, also accused of default on loans worth RS 680 Crore needed from various other banks.
KSBL is one of the largest broking companies in India with more than 2.5 lakh clients before fraud is revealed.
“Companies accused of being defaugter by diverting funds into their own or connected business entity accounts.
In November 2019, Sebi revoked securities promised to bank and NBFC and returned securities to client accounts.
Complainant banks are left without collateral and thus KSBL Default in payment around RS 137 Crore to Indusind, “police said.
After his arrest, Parthasarathy moved a guarantee petition in the Nampally Criminal Court, who had not yet decided on the date of listening to the petition.