2 banks file cheating case against Karvy arm

Karvy Stock Broking Limited (KSBL) has been booked in a cheating case for defaulting Rs431-crore loans to IndusInd, HDFC Bank, which had filed cases with the Hyderabad CCS Cyber Crime Police. Both the banks in their complaints stated that KSBL didn't repay the loan taken and also transferred the funds to other entities. The IndusInd bank had granted a loan of Rs 185 crore to KSBL on depositing the securities and guarantees to the bank in 2019, but company has not repaid. Further, KSBL illegally transferred the Rs138crore to other companies, according to the complaint filed by the bank.

In September 2019, HDFC Bank extended loan of Rs350 crore against shares, but only paid Rs142 crore and the remaining balance loan amount of Rs208 with Rs38 crore interest remain unpaid. The total amount due from HDFC Bank is Rs246 crore, said bank's deputy vice-president Srinivas, who filed the case with CCS against KSBL directors Commander Parathasartathi, Shiva Rama Krishna Mullapuri, Rajat Parthasarathi and Shushil Kumar.

The CCS Cyber Crime Police also registered the cases and began investigating, said the officials. IndusInd and HDFC Bank complained that KSBL willfully defaulted the loan amount and requested the police officials to stringent action against KSBL. It may be recalled that Sebi already scrapped the licence of KSBL for availing of loans by mortgaging shares of its clients with the banks.