MUMBAI, Sept. 12 -- The Bombay High Court on Thursday refused to discharge Rajiv Ranjan Singh, former Chief Executive Officer (CEO) of Karvy Stock Broking Limited (KSBL), from criminal proceedings in a case where he allegedly misused client securities worth Rs.2,700 crore. Justice Amit Borkar dismissed Singh's plea, upholding a special court's earlier decision that there was enough evidence to put the accused on trial under the Securities and Exchange Board of India (SEBI) Act. KSBL, once one of India's largest brokerage houses, collapsed in 2019 after SEBI unearthed massive irregularities in the firm's dealings. Investigators alleged that the firm had used client securities without their consent, diverted funds to other companies, and misused its position as a depository participant, one who manages the investments of their clients. The scandal shook investor confidence, as thousands of retail investors and clients found that their securities had been illegally used as collateral. In his plea, Singh, who was the company's CEO at the time, argued that he had already been cleared in an order by SEBI in April 2023, where no penalty was imposed on him. He claimed that after SEBI's regulatory proceedings had found no issues with his role at KSBL, criminal prosecution against him should stop. The court disagreed, noting that SEBI's order did not amount to a full exoneration. The court held that Singh had "actively participated" in collecting client securities under questionable schemes and had failed to act with the diligence expected from a senior market professional. "The order only refrains from imposing a penalty but does not absolve him of responsibility," the court added. The court said that under Section 27(1) of the SEBI Act, any person in charge of a company at the time of an offence is liable, even if they did not personally execute the wrongful acts. The 2019 investigations had revealed that KSBL allegedly misused the power of attorney granted by clients for trading purposes, and transferred securities from client's demat accounts into its own pool account. The brokerage house then used those pooled securities as collateral to borrow from banks and other financial institutions. In 2020, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) declared KSBL a defaulter and terminated its membership....