It may be recollected that ICICI Bank had extended a loan of Rs.642 crore to Karvy Stock Broking against share pledges and other collateral. However, these shares were owned by clients and were illegitimately pledged by Karvy in favour of ICICI Bank. Meanwhile, ICICI Bank had ended up incapable of invoking the pledge as SEBI passed an interim order against Karvy on November 22 restricting share transfer except to beneficiary owners. At the same time, SEBI also instructed NSDL to transfer all such shares without any client outstanding to client’s DP accounts. This had virtually left ICICI Bank and other banks with an unsecured loan, which had resulted in their approaching the DRT. Earlier, ICICI Bank, Bajaj Finance, HDFC Bank and IndusInd Bank had approached SAT for relief against the order, which was not granted.

In its plea to DRT, ICICI Bank had sought that promoters disclose their assets and that Karvy Group’s former CMD, C. Parthasarathy, and his son, Rajat Parthasarathy, be restrained from leaving India till completion of case proceedings. This is likely to be a long drawn process but ICICI and the other banks surely have a strong case of fraud against Karvy.