Karvy boss diverted Rs 550 crore to shell companies: Investigators

Hyderabad: The management of Karvy Stock Broking Limited (KSBL), which indulged in bank frauds, have diverted Rs 550 crore to other accounts. The investigation officers (IOs) have filed a charge-sheet in connection with IndusInd Bank stating that the chairman and managing director C Parthasarathi had played a key role in the fund-diversion.

Five cases were registered by Hyderabad CCS police and IOs filed a charge-sheet in one of the cases finding fault with Parthasarathi. In the five cases, police have identified a fraud of Rs 3,520 crore. At least Rs 2,700 crore worth shares and securities of customers were diverted to other accounts.  

A senior official said that they have filed a charge-sheet in the IndusInd case in which the accused duped a number of its customers by diverting Rs 550 crore.  The investigation officers have obtained data of KSBL from RBI, SEBI, NSE, Income-Tax department and others.

Investigation officers have collected witnesses from 120 persons in connection with the bank fraud. Parthasarathi established 20 shell companies and diverted funds to them. In the balance sheets, the accused showed business loss to divert the attention of investigation agencies.

The KSBL had availed credit facilities of Rs 137 crore from IndusInd Bank by pledging securities and shares and personal guarantee of its CMD while suppressing the facts that the pledged securities belonged to the customers.
It was also found that the KSBL management transferred Rs 1,000 crore to Karvy Realty company between 2016 and 2019.  The Investigation officers are all set to file charge-sheets in the remaining cases before the court.