ICICI Bank registers cheating case against Karvy Stock Broking

ICICI Bank has registered a case against Karvy Stock Broking promoter C Parthasarthy and others for cheating the lender to the tune of Rs 563 crore. According to a statement by the police on Tuesday night, the case was booked under Sections 406 (criminal breach of trust), 420, r/w 34 ( cheating) of IPC.

The police said in a release that funds raised by Karvy by pledging shares of its six bankers were transferred to the firm’s own bank accounts and not into ‘Stock Broker Client Account’, which is a violation of the SEBI guidelines.

“Further, all pledges on securities were closed without approval… and securities were transferred to end clients of KSBL thereby severely impacting the security of all lenders including ICICI Bank,” it said.

It has been contended that KSBL with the alleged dishonest and fraudulent intent of cheating and criminal conspiracy had misappropriated the financial assistance for their personal benefit, causing a breach of trust and wrongful loss to ICICI Bank and wrongful gain to the company and its management.

A case has been registered and transferred to the Economic Offences Wing, Cyberabad following the complaint. A special team has been formed to investigate the case.

Meanwhile, Parthasarthy was arrested on August 19 by the Hyderabad Police for allegedly defaulting on a loan taken from IndusInd Bank. KSBL had taken a loan of Rs 185 crore in 2019 but the company failed to repay. KSBL also allegedly transferred Rs 138 crore to other companies illegally.

Also read: Karvy Chairman C Parthasarathy held for defaulting bank loan