Karvy chairman arrested on IndusInd complaint of concealing facts

The Hyderabad police arrested Karvy Stock Broking Ltd (KSBL) chairman C Parthasarathy on Thursday, acting on a complaint lodged by IndusInd Bank. The bank alleged in its complaint that KSBL had availed a credit facility of ₹137 crore from it by pledging securities and Parthasarathy’s personal guarantee. However, the brokerage suppressed the fact that the securities actually belonged to the clients, said the police.

“In the said case, this was done without their consent and misusing the power of attorney. The securities were transferred into the demat account of KSBL and pledged before the bank for margin and short term requirement in the business of KSBL from March, 2013,” the police said in a press release.

Parathasarathy, who was arrested from his residence, was presented before the additional chief metropolitan magistrate’s court, which remanded him in judicial custody for 14 days. His lawyer was not immediately available for comment. The police said the probe by the detective department of its Centre Crime Station (CCS) unit revealed that ₹1,400 crore was diverted by Parthasarathy either for the purpose of evergreening of loans or for proprietor trading.