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Karvy Broking holds back clients’ funds

Many disgruntled customers have been venting their anger on Twitter.

Updated: Dec 07, 2019, 12.21 PM IST
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In the last mail he got from Singh, earlier this week, he was promised to be paid by December 25.
(This story originally appeared in on Dec 07, 2019)
Karvy Stock Broking not only illegally pledged clients’ shares but also held back their payments for months after investors sold through the troubled brokerage firm, it is learnt. Karvy Stock Broking didn’t reply to an email from TOI about complaints by clients about non-transfer of funds to their accounts.

In one case, a US citizen, who offloaded stocks worth Rs 3.8 crore on September 21, is awaiting payment despite promises by Karvy CEO Rajiv Singh that it would be made in full.

Over two months ago, University Venture Fund chairman and Unitus Capital co-founder Geoff Chester Woolley, who was a Bharat Financial Inclusion (formerly SKS Microfinance) director till its recent merger with IndusInd Bank, sold 27,000 IndusInd Bank shares worth Rs 3.8 crore. He’s still waiting for the proceeds to be credited to his account. “I instructed Karvy to sell (those) shares and send the proceeds to my US bank account,” Woolley told TOI in an email.

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On September 21, Karvy Stock Broking sold the shares and after deduction of charges was to transfer nearly Rs 3.83 crore to his US bank account. “But the proceeds were never sent. After two weeks of chasing Karvy, they basically went silent,” said Woolley. He said he had dealt with Karvy Stock Broking previously also, but had never faced such a problem.

“Rs 3.8-crore does show up in my demat account online as cash, but it doesn’t allow me to transfer the funds or buy other securities. That remains the situation today,” said Woolley, who has filed a complaint with Sebi, which has been shared with NSE.

Even after directly contacting Singh and sending a representative to Karvy Stock Broking’s office, all he heard from the broker were promises to pay at a future date, which invariably got postponed to a new date.

In the last mail he got from Singh, earlier this week, he was promised to be paid by December 25. “Unless Santa provides Karvy a present for Christmas, I assume Karvy will not pay,” Woolley said. Woolley is just one of the thousands of Karvy Broking clients awaiting their payments. Many anxious and disgruntled customers have been venting their anger on Twitter.

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