C.Parthasarathy, chairman-managing director of Hyderabad-based Karvy Stock Broking Ltd has been arrested by the Central Crime Station of Hyderabad Police on the complaint of IndusInd Bank of defaulting on a loan of Rs 137 crores after illegally pledging client shares.
The company had availed credit facilities to the tune of Rs 137 Crores by pledging securities and shares without the consent of the clients misusing the power of attorney. To that effect, a case has been registered at CCS DD Hyderabad. The funds were diverted to Karvy's own and connected businesses.
Karvy defaulted around 350 Crore Rupees to the HDFC bank as well. In November 2020, the Bombay Stock Exchange declared Karvy as a defaulter and removed it from its membership. In November 2019, the National Stock Exchange barred Karvy from taking new brokerage clients after it was found that the firm had misused clients' securities to the tune of over Rs 2,000 crore.