Karvy Stock Broking Ltd on Monday refuted the accusations of cheating by nine complainants from the city and said Karvy entities have acted only as channel partners, facility agents or debenture holder representatives.
The response came to a DH report on FIR filed by Basaveshwaranagar Police in which, nine investors accused the company of cheating them of Rs 3.81 crore.
“We wish to clarify that Karvy has not misled or cheated any investor, much less the present complainants. The subject matter of the present complaint is about the investments made by these complainants with certain Developers, namely C&C Towers Ltd, Mirador Constructions Pvt Ltd, Bhagyalakshmi Homes LLP among others, who have received the investment money from these complainants and committed default in repaying the same,” the company said.
In its response, the company said that Karvy Private Wealth (KPW), one of the divisions of Karvy, is a professionally managed wealth management business that guides investors on where to invest to get the best possible returns. “In the processes, KPW recommends a variety of asset classes to individual investors depending on their goals and their risk appetite. The division, after adequate research, recommends investments to High Net worth Investors in equities, mutual funds, debt instruments, real estate investments etc. It only caters to select customers who fall in the high net worth category and clearly mentions the risks involved,” it said.
The company said that the complainants had invested in high yield and thereby high-risk instruments. Karvy’s entities have acted only as channel partners, facility agents or debenture holder representatives. All Investments referenced to investors were done after adequate due diligence. The investors were explained of the risks involved in these instruments and provided them with all documents that were available to us from issuer companies. All these investors have taken informed decisions to invest in these products after perusing the documents available to them. Karvy has acted only as a broker and a facilitator. The investors were issued documents directly by the issuers, it said.
The response said: “Owing to unfavourable market conditions, various sectors, especially real estate has been going through a very bad phase for the last couple of years. Coupled with that, the funding opportunities from NBFC and banks have taken a major hit because of the recent defaults. Karvy, in the capacity as a facility Agent, has been making incessant efforts to recover the money from these entities and has been taking various steps to safeguard the interests of the investors and as part of such initiatives, Karvy has provided support to investors by assisting them to initiate proceedings against these entities before National Company Law Tribunals (NCLT) at Bangalore, Chandigarh, Mumbai and New Delhi. We submit that these investors, who have complained to Bangalore Police, are aware of the efforts being made by us, and in fact, most of them are also party to the said litigations.”
Further, the company stated that in its 35-year-old history, it has kept the best interests of its customers in mind and will continue to do so.
