Hyderabad: Top officials of Karvy Group, a financial services company, have been booked for alleged cheating and breach of trust by the Bengaluru police.
The CEO of Karvy Group’s private wealth arm and directors of the city-based company were alleged to have defrauded nine investors by mis-selling investment products.
The Bengaluru police has registered a case under Indian Penal Code Sections 406 (punishment for criminal breach of trust) and 420 (cheating and dishonestly inducing delivery of property) against Karvy Private Wealth’s chief executive officer (CEO) Abhijit Bhave, directors of Karvy Stock Brokers, Karvy Realty India Pvt. Ltd and Karvy Capitals.
This was the result of a complaint filed by an NRI couple, Ms Ketaki Shah Talati and Mr Mayank Harshad Talati.
The accused are Abhijit Bhave CEO, Karvy Private Wealth (A1); Pravin Garle, Real Estate Head (A2); Karvy chairman C. Parthasarathy (A3); Yugandhar Meka (A4), Ashish Agrawal (A5), Bhagwan Das Narang (A6), Nithin Sabharwal (A7), Pravinbhai Bhagwanji (A8), Nitihin Sexena (A9), Prathivadi Bhayanakaram Ramapriyan (A10), Venkata Sesha Ravi Prasad Chavali (A11), Vhethan Deherkar (A12) from Mumbai and Thomas Stephen(A13) from Basavanagundi, Bengaluru.
Ms Talati told Deccan Chronicle, “In June 2015, we came across Karvy Private Wealth’s advertisement on their website Karvywealth.com about secured, safe, high-return debt products for high net-worth individuals (HNI). We met Mr G. Srinivasan (relationship manager) at Karvy Private Wealth to take their investment advice. On being lured by an attractive scheme and assurance of protecting our money, we trusted Karvy Private Wealth investment and opened accounts.”
She alleged, “We were lured to invest more and more in different schemes prepared by different Karvy groups of companies. They assured us that our investment was 200 per cent to 400 per cent secured in securities of land parcels, villa plots or commercials space.”
“Karvy assured that the value of these securities was two or four times the amount given to builders raised from Karvy investors. For every secured investment marketed by Karvy, we were asked to write cheques to different real estate companies (builders). We were asked to pay an advisory fee to different Karvy groups of companies,” she alleged.
According to the complainant, Karvy promised scheme and security from the following companies — C&C Towers Limited, Mohali junction, Chandigarh; Mirandor Construction Private Limited, Maharashtra; Green Farmtech Private Limited, Kasata Hometech India Private Ltd, Gujarat.
The complaint on which the Karvy group has been booked is that it defrauded money by channelling false investment advise through Karvy Private Wealth.
According to the complaint, the group breached its fiduciary duty towards investors by marketing and selling illegal and unsafe investment products.
“Our money was parked in Karvy as savings for my children’s education or for their retirement income. The returns stopped in 2017. Initially, Karvy blamed demonetisation for the delay, and later the GST rollout. Though we were promised that things would be set right after the Lok Sabha elections, the company’s cheques bounced this month,” Ms Talati said. That is what led to the police complaint.
Since the complainants have not interacted with the companies where Karvy has invested their money, they held Karvy relationship managers responsible for their loss.
According to the FIR registered by the Basavanagundi police of Bengaluru, 13 Karvy officials have been booked for criminal breach of trust and cheating. Of these, 10 are from TS, two from Bengaluru and one from Mumbai....