The Central Crime Station (CCS) in Hyderabad on Friday arrested Karvy Stock Broking Ltd's Company Secretary Y. Sailaja in the bank loan default case.
The police produced her before a city court, which sent her to judicial custody.
She allegedly created a false resolution claimed to be passed in the meeting of Board of Directors of KSBL held during the year 2018.
The arrest was made after the investigators found that the resolution was not passed in the actual meeting as per the original record of minutes of Board of Directors meeting.
By falsely representing this resolution document, KSBL Chairman and Managing Director C. Parthasarathy availed loan of Rs 350 crores from HDFC Bank by pledging the shares of KSBL clients illegally, and later defaulted in payments.
Meanwhile, CCS officials on Friday interrogated Parthasarathy, who is facing the charges of raising loans from banks against the securities of his clients without their consent and defaulting in repayment of loans.
The CCS police on Friday took custody of Parthasarathy for two days for questioning him in connection with a complaint lodged by HDFC Bank that he availed Rs 350 crore loan by pledging the shares of KSBL clients illegally and later defaulting in payment.
The police had arrested Parthasarathy on August 19 after registering a case on the complaint of IndusInd Bank that KSBL availed Rs 137 crore credit by pledging securities and shares of its clients without their consent and by misusing the power of attorney.
The company defaulted on the loan by diverting the funds into its own and connected business entities.
Since then, the police questioned him twice to elicit more information about the case.
CCS police on Thursday arrested KSBL Chief Executive Officer Rajiv Ranjan Singh and Chief Financial Officer G. Hari Krishna.
Both the accused were produced before a court, which sent them to judicial custody for 14 days.
On the direction of Parthasarathy, the CFO allegedly diverted funds raised from banks by pledging clients' securities as collateral to nine shell companies to show a huge turnover.
As incharge of trading and broking, Singh had allegedly executed unauthorised trading in the name of nine companies since 2014.
In November 2019, the Securities and Exchange Board of India banned the KSBL over client defaults. The company was banned from taking on new clients and executing trades for existing customers.
This followed an investigation by the National Stock Exchange which found that Karvy had allegedly sold client stocks pledged with it through associated entities.
The Cyberabad police on August 23 registered a case against Partha Sarathy and others for allegedly duping ICICI bank of Rs 563 crore.
A case of cheating and criminal breach of trust was registered against KSBL, Partha Sarathy, Yugandhara Rao and others, on a complaint given by the ICICI Bank manager.
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