Karvy scam: One more arrested for creating false document to obtain Rs 350 Cr loan

Hyderabad : Adding to the spate of arrests in the Karvy Stock Broking Limited case, the company secretary of the group, Y Sailaja, was arrested by the city police for creating a false resolution document which resulted in the managing director of Karvy pledging his clients’ shares to avail a bank loan of Rs 350 crores.
Sailaja had claimed that the resolution was passed in the original board of directors meeting which had not actually happened.
A day earlier, the chief operating officer Rajiv Ranjan Singh and the chief financial officer G. Krishna Hari of the Karvy Stock Broking Private Limited were arrested by officials of the central crime station today.
They were arrested after an FIR was filed against Karvy Stock Broking company base on a complaint by the vice president of IndusInd bank, Hyderabad on allegations of availing credit facilities of Rs. 137 crores from the complainant bank by pledging securities/shares and personal guarantee of Chairman C Parthasarathi. The accused suppressed the facts that the pledged securities actually belong to the clients and did so without their consent.
The securities were transferred into the Demat account of Karvy Stock Broking Limited and pledged before the complainant bank for margin and short-term requirement in the business of KSBL from March 1, 2013.
 The accused company became a defaulter by diverting the funds into their own and other connected businesses entities and on November 22, 2019, the SEBI revoked the pledge of securities with Banks/NBFCs and returned the securities/accounts.