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Karvy Stock Broking Chairman C. Parthasarathy arrested for alleged loan defaults in Hyderabad

Witness, Hyderabad: Karvy MD C. Parthasarathy has been arrested on charges of evading bank loans. CCS police on Thursday arrested him in connection with a Rs 780 crore debt evasion case. CCS‌ police took action on the complaint of various banks. C. Parthasarathy borrowed from various banks by mortgaging Karvy shares. He borrowed Rs 340 crore from HDFC Bank, Rs 137 crore from Indus Ind Bank and another Rs 7 crore from HDFC Bank. Banks have complained that those loans have been misused. He was produced in court in Nampally.

It is learned that Karvy has been banned by SEBI in the past. The CCS is currently investigating the whole, serious fraud investigation along with the police. Karvy Stock Broking has millions of customers across the country. Thousands of crores of investments have been made by consumers across the country. Banks were outraged when MD Parthasarathy Reddy mortgaged customers’ shares to banks. CCS police arrested him and remanded him in custody.

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M/s Karvy Stock Broking Pvt Ltd Hyderabad was accused of defaulting repayment of a loan Rs 137 crore availed from IndusInd Bank’s Hyderabad branch.

The complainant bank was left with no collateral and thereby, KSBL defaulted in the repayment of about Rs 137 crore as of March 31, 2021, police said.

Karvy Stock Broking Chairman C. Parthasarathy arrested for alleged loan defaults in Hyderabad

The accused company here is also learnt to have taken credit facilities from several other banks/NBFCs to the tune of about Rs 680 crore by pledging client securities without their consent and defaulted on further repayment.

Police invoked IPC Sections 406 (criminal breach of trust), 420 (cheating), 409 (criminal breach of trust by a public servant, or by banker, merchant or agent), 421 (dishonest or fraudulent removal or concealment of property to prevent distribution among creditors), 422 (dishonestly or fraudulently preventing debt being available for creditors), 120(B) (criminal conspiracy) against the accused and others.

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