Hyderabad: Six financial firms order audit on Karvy Stock Broking Ltd dealings

HYDERABAD: Six financial firms, including three banks, which lent Rs 780 crore in loan to Karvy Stock Broking Ltd (KSBL), have engaged a firm to ascertain how the money was diverted, even as police said they will seek custodial interrogation of KSBL chairman and managing director C Parthasarathy.
Probing the bank default case, the Hyderabad police said on Friday they are also waiting for the audit report, before taking further action.
While three banks came forward to lodge a police complaint, three more financial companies have also lost their money by issuing loans to KSBL, who in turn allegedly pledged its client shares as security deposit for the loan.

“In 2019, the National Stock Exchange (NSE) got a forensic audit done on KSBL to know how the company diverted the clients’ shares in violation of SEBI rules. Now, the six banks which lent loans to KSBL, is conducting forensic audit to know, how the loan amount was diverted by its management,” a senior official in Hyderabad police told TOI.
KSBL chairman and managing director C Parthasarathy and other accused, have allegedly diverted the money into the accounts of their subsidiary firms and related accounts.
The investigation agency has asked the Income Tax department to furnish the PAN details and tax returns of KSBL directors, who have defaulted. Police suspect that the loan amount, which was allegedly diverted were again put to trading through different firms.
“To ascertain the facts, the audit report is going to throw light about the diversion,” another official said.
CCS officials are also receiving fresh complaints that KSBL authorities allegedly misappropriated the money in trading accounts of some clients, who requested for sale or purchase of shares.