Karvy Group CMD C Parthasarathy resigns from Fintech board
By Newsmeter Network Published on 27 Nov 2019 7:28 AM GMT
Highlights
- Parthasarathy assures of clearing dues in 15 days; Stake sale likely to tide over liquidity crunch; may change name of Karvy Fintech
Hyderabad: Yielding to mounting pressure after the Sebi (Securities and Exchange Board of India) ban on accepting new accounts, Karvy Group's CMD C Parthasarathy resigned from Karvy Fintech board. Subsequently, the name of Karvy Fintech, a registrar and transfer agent (RTA) to fund houses, will be changed to establish delinking with Karvy Stock Broking firm. The CMD assured investors of clearing dues within 15 days. He said that the due was below Rs 30 crore only to 150 clients.
On the other hand, the Karvy Group is reportedly trying to offload some stake in one of the group companies. The stake sale may pull the group out of liquidity crunch, said an analyst.
A spokesperson at Karvy Group confirmed the resignation of Parthasarathy from Fintech board. Former chairman of Union Bank of India (UBI) is the new chairman of Karvy Fintech.
Acting upon the complaints filed against Karvy for allegedly mortgaging securities of investors, who have Demat accounts with Karvy Stock Broking firm, market regulator Sebi on last Friday barred the company from accepting new customers.
Parthasarathy and his associates hold 16.75 percent stake, while the remaining shares are held by private equity firm General Atlantic (GA).
Karvy Stock Broking and Karvy Fintech are independent entities, said the Karvy Group. Karvy Fintech serves major 20 fund houses including UTI MF, Axis MF, and Nippon India MF. It also provides services to the National Pension Scheme. Sebi said that investors are worried about the safety of their investments in several mutual fund schemes, for which Karvy Fintech offers services.
Meanwhile, several investors, who have accounts with Karvy Stock Broking, are applying in large number to transfer their Demat accounts to other broking firms. The shifting of investors would impact the performance of Karvy Stock Broking, observed a market analyst.
