Hyderabad: From retired policemen and government employees to young self-employed businessmen, the Karvy fiasco has affected people from all over the country. Scores of investors have contacted Deccan Chronicle over the past couple of days to express their grief and anger about the situation. Even investors living in Oman have reached out, fearing that their money might be lost to possible financial malpractice by the Hyderabad-based stock broking firm.
It may be recalled that Karvy has been accused of misusing client faith by pledging their securities as collateral in banks for obtaining loans. It has been accused of misappropriating Rs 2,000 crore in this manner. On November 22, the Securities and Exchange Board of India (SEBI) blocked Karvy from accepting new clients and taking shares in delivery. Since then, however, even old clients of the company have not been able to gain control over their own shares. Payouts have been kept pending for a vast majority of the investors.
Vijay Kumar Dham retired as an assistant commissioner of police in Delhi police a few years ago. As a policeman, Dham might have met numerous victims of financial crimes. Little did he know that he would become one. “I never trusted the stock market or even mutual funds. My friends convinced me into investing with Karvy. At least `10 lakh of my family’s money is blocked with them,” he said. The money is invested under name of Dham’s wife. Dham said some of his friends told him to use his clout as a former cop to reach out to Karvy management. “I have not done anything like that. But the world used to come to us to solve their problems. Today, I find myself helpless. Karvy management is completely unresponsive and are very opaque,” he said.
Rahul Kumar, a young investor from Gurgaon, has as much as `2.6 lakh of his money blocked. He has invested through Karvy’s Sonipat branch.
“I first invested in Karvy when I was a student in college 10 years ago. Today, I have shares worth `2.6 lakh. I have been requesting a payout since November 2019, but I haven’t received anything yet. I have emailed them countless times since then, but no one has replied to me. The whole matter has been very distressing to me,” he said.
Kumar said he has already lost money due to drop in his share prices. “I wanted to sell them a few days ago, but was unable to because of this mess. I have sent them many mails already but no one is responding.”
Ashok Kumar Ghose from Pune has shares worth almost `16.5 lakh (calculated at current share prices) blocked. “I have major holdings in Reliance Industries, Hindustan Unilever and ITC shares. They should be in my demat account but they are currently in the Karvy pool account, so I am unable to access them,” he said. Ghose said he placed a sell order on some of his shares, worth another `5 lakh, on November 23. This payout has not been honoured yet. Ghose wanted to use this money to pay for his wife’s recent medical expenses. “I have been calling Karvy’s Pune office almost everyday. I am a senior citizen. You can imagine the stress and anxiety that comes with running around in circles,” he said.
Sekhar from Kakinada is a small-time inter-day trader by profession. He is struggling to get a payout of `1.3 lakh from Karvy to pay for his cousin’s open heart surgery. “Trading is how I pay for my family’s daily expenses. How can I survive if all my money is stuck with Karvy,” he asked.
Elis Gupta, a bank manager in his mid-twenties, is struggling in the same situation. His shares do not reflect in his demat account. The only proof of his ownership is through NSDL certificates. “Shares worth almost `1.6 lakh are stuck with Karvy. They are not being credited to my demat account. The uncertainty over whether I will ever see this money again has shaken me up,” he said. In his email to Karvy, to which he hasn’t received a satisfactory reply yet, he asked the company to “credit all these shares to my demat account as it is causing me mental harassment.”
Subin, a Keralite working in Oman, reached out to Deccan Chronicle to convey his anxiety about the matter. A trader with Karvy for over a decade with a portfolio worth `3.7 lakh, he said most of his shares are still in the pool. “This fiasco has cost me a lot. I recently bought a few shares but their prices tanked soon after. I wanted to sell them but they are still in the pool account and not my demat account. I am left helpless since I am unable to sell them.”
The panic among the investors is palpable. Over the past few days, they have formed WhatsApp groups to discuss a plan of action. In a group named ‘Karvy victims,’ a member said, “Waiting is the only option.” Experienced members are suggesting to file complaints with SEBI. They assured that it is only a matter of time before the shares return to them. Others asked to tweet with the hashtag “#ghantibhajao” (ring the bell), hoping that this would wake the world up to their situation. Investors who have lost money or have their shares locked because of this Karvy scandal can contact DCforKarvyInvestors @gmail.com