Hyderabad: Telangana The High Court on Friday gave its nod to the Serious Fraud Investigation Office (SFIO) to initiate its probe against Karvy Stock Broking Ltd (KSBL) for alleged financial fraud by CMD C Parthasarathy and others of the company.
A bench of Chief Justice Satish Chandra Sharma and Justice N Tukaramji said the company has been creating legal hurdles for the SFIO probe by the Union Corporate Affairs Ministry since the order was passed in February 2020.
HC: Karvy tries several ways to stall probe
The bench delivered the verdict after hearing two appeals of the company challenging the single judge order allowing the SFIO probe in August 2020. Following the company’s appeal, a division bench of the HC stayed the single judge’s order. In the same appeal, the present bench dismissed the petitions of Karvy and gave its final verdict.
“We find no reason to interfere with the order of the single judge,” the bench said, finding fault in Karvy’s conduct, “to create every possible impediment at every stage with the sole objective of stalling the SFIO probe”. “The accused company has adopted various methods to stall the investigation. Writ petitions have been filed, interim orders have been given and the matter is not proceeding, which means that the investigating agency was unable to proceed from day one.” The bench said.
Dismissing the technical objections raised by the company against the Centre’s order of inquiry, the bench observed that the record clearly shows that the Centre’s decision was based on a clear conclusion following the report of the Registrar of Companies (ROC). “Furthermore, Karvy could not tell what would be the bias if the investigating agency looks at its records. The authorities have followed a transparent process and have given the company an opportunity to present their side. The officers are bound to give a statement to the company. The company got an opportunity under the Act and hence they followed it up.” It added that other material in the public interest was also considered by the Center before the investigation.
A bench of Chief Justice Satish Chandra Sharma and Justice N Tukaramji said the company has been creating legal hurdles for the SFIO probe by the Union Corporate Affairs Ministry since the order was passed in February 2020.
HC: Karvy tries several ways to stall probe
The bench delivered the verdict after hearing two appeals of the company challenging the single judge order allowing the SFIO probe in August 2020. Following the company’s appeal, a division bench of the HC stayed the single judge’s order. In the same appeal, the present bench dismissed the petitions of Karvy and gave its final verdict.
“We find no reason to interfere with the order of the single judge,” the bench said, finding fault in Karvy’s conduct, “to create every possible impediment at every stage with the sole objective of stalling the SFIO probe”. “The accused company has adopted various methods to stall the investigation. Writ petitions have been filed, interim orders have been given and the matter is not proceeding, which means that the investigating agency was unable to proceed from day one.” The bench said.
Dismissing the technical objections raised by the company against the Centre’s order of inquiry, the bench observed that the record clearly shows that the Centre’s decision was based on a clear conclusion following the report of the Registrar of Companies (ROC). “Furthermore, Karvy could not tell what would be the bias if the investigating agency looks at its records. The authorities have followed a transparent process and have given the company an opportunity to present their side. The officers are bound to give a statement to the company. The company got an opportunity under the Act and hence they followed it up.” It added that other material in the public interest was also considered by the Center before the investigation.
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