Hyderabad CCS Files Another Criminal Case Against Karvy CMD Parthasarathy

Hyderabad: The Central Crime Station (CCS) of Hyderabad police have filed another case against the Karvy Chairman and Managing Director (CMD) C Parthasarathy in connection with the multi-crore fraud by Karvy Stocks Broking Limited (KSBL) for cheating investors. 

The new criminal case is related to the alleged cheating of Axis Bank after availing the credit facility of Rs 159 crore. Parthasarathy and seven others were arrested by the Hyderabad police in 2021 for duping IndusInd bank to the tune of Rs 137 crore .

The eight other accused in the KSBL fraud case are Rajiv Ranjan (COO), G Krishna Hari (CFO), Srikrishna Gurazada, Prabhakar, Srinivas Raju, Shesha Sai and Varaprasad. The accused are currently lodged in Chanchalguda Central Prison. 

KSBL is accused of fraudulently transferring shares belonging to its clients to its own demat account. It then pledged the shares held in these accounts with the lender banks — HDFC Bank, ICICI Bank, IndusInd Bank and Axis Bank. KSBL credited the funds raised by pledging of client securities to six of its own ‘Stock Broker-own Accounts’ instead of the ‘Stock Broker-Client Account’. It did not report these six Stock Broker-Own Accounts held with various private banks, to SEBI.

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The Enforcement Directorate (ED), in September 2021, froze the shares of KSBL valued at Rs 700 crore as per the valuation for the year 2019-20. It initiated a probe on Karvy Group of Companies for its offence of money laundering to the tune of Rs 2,873 crore.