Karvy Stock Broking CMD arrested for ‘loan default’

C Parthasarathy, chairman and managing director of Karvy Stock Broking Pvt Ltd (KSBL), was arrested by Hyderabad police on Thursday for allegedly defaulting on bank loans. IndusInd Bank has filed a police complaint against him after he defaulted on a loan of Rs 237 crore.

The FIR was filed and he was apprehended by the Central Crime Station’s Detective Department. Parthasarathy was detained for defaulting on a loan from IndusInd Bank in 2019 and moving the funds to other bank accounts, according to Joint Commissioner of Police (Detective Department) Avinash Mohanty.

He had also defaulted on a loan from HDFC Bank, according to officials, and an inquiry is underway. In a June complaint, the banks claimed that Parthasarathy pledged his clients’ shares and obtained loans, then moved the funds to other companies and began defaulting on repayment.According to officials, HDFC Bank extended a loan of Rs 350 crore. The Securities and Exchange Board of India (Sebi) barred KSBL from taking on new business in 2019 after it was accused of misappropriating almost Rs 2,000 crore in money and securities from its investors to support its real estate company Karvy Realty.

Karvy was able to borrow money by pledging clients’ shares with lenders including as HDFC Bank, ICICI Bank, IndusInd Bank, and Bajaj Finance Ltd, putting the investment of over 90,000 investors at danger.

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