Bank loan

Karvy Stock Broking Chairman Arrested for Bank Loan Default

One of the promoters of the Karvy Group scam was arrested here Thursday for non-payment of a bank loan, police said.

C Parthasarathy was arrested for non-payment of a loan taken from IndusIndbank in 2019 and for diverting the funds to other bank accounts, said Avinash Mohanty, Joint Police Commissioner (Detective), adding that ‘there were two similar cases against him filed by HDFC bank.

According to him, the HDFC bank also filed a similar complaint against the Karvy group.

The banks in their complaint alleged that the Karvy group represented by Parthasarathy illegally pledged the shares of its customers and used loans. The loan amounts were diverted to other companies and subsequently defaulted, the official added. The HDFC bank in its complaint alleged that Karvy, in total, defaulted by almost Rs 350 crore while it was around Rs 237 crore in the case of IndusInd Bank. In November 2020, the Bombay Stock Exchange declared Karvy Stock Broking in default and pulled the brokerage house from its members after similar action was initiated by the National Stock Exchange.

In November 2019, the regulator banned Karvy from taking on new brokerage clients after discovering that the brokerage firm had allegedly misused its clients’ securities for more than Rs 2,000 crore.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor