Karvy Stock Broking Ltd. is a financial services company in India. It is involved in financial services like Equity, Commodities trading, and depository and wealth management services, and distribution of other financial services. Its headquarters are in Hyderabad, India. It has its branches in different parts of India and outside India too. It is one of the most known stock brokers in India.
On Thursday the Chairman of Karvy Stock Broking, C Parthasarthy was allegedly taken into custody from his residence by the Hyderabad City Police’s detective department for defrauding the loan taken from the IndusInd Bank.
IndusInd Bank had filed a case against Parthasarthy stating that he had taken credit of Rs. 137 crore by pledging the client’s shares without their consent, embezzled the power of attorney, and furnished it as the collateral with the bank. Later, the securities were converted into the Demat account of Karvy Stock Broking Private Limited. The fraud was disclosed and he has been arrested by the Hyderabad police and further investigation is going on.
On the earlier occasion, cases have been filed against Karvy for defaulting the credit. HDFC bank is one of them stating that Karvy has defaulted the loan amount of Rs even in their bank. 350 crore. They also have given a similar statement that Karvy has pledged the client’s shares and has availed the loan.
In November 2019 one of the regulatory authorities prohibited Karvy from taking new clients after they found out the fraud of misusing the client’s shares.
In November 2020 National Stock Exchange and Bombay Stock Exchange declared Karvy Stock Broking a defaulter and removed it from their membership.
The Hyderabad City Police has given a statement that Parthasarthy has been arrested and after the investigation, the complete picture of the fraud and the hands behind the fraud will be disclosed.