Hyderabad: ED attaches Rs 110 crore assets of Karvy stock broker firm

A big chunk of mortgage proceeds was transferred into shell insurance coverage firms, which indulged in speculative share buying and selling with KSBL to tide over losses suffered by the brokerage agency

HYDERABAD: Enforcement Directorate (ED) on Saturday provisionally connected belongings of Rs 110 crore as a part of the cash laundering probe towards Karvy Inventory Broking Ltd (KSBL), agency chairman Comandur Parthasarathy and others. Thus far, ED has connected belongings of Rs 2,095 crore beneath Prevention of Cash Laundering Act (PMLA).
KSBL chairman C Parthasarathy and Group CFO G Hari Krishna, who had been earlier arrested on cash laundering expenses, are at the moment out on bail.
In 2021, ED launched investigations after FIRs had been lodged by central crime station police of Hyderabad on complaints by banks, which alleged Karvy Group had availed giant quantities of loans by illegally pledging purchasers’ shares of Rs 2,800 crore. Subsequently, loans had been diverted by high functionaries of the agency beneath C Parthasarathy’s supervision. Funds had been ploughed into sister corporations – KDMSL and KRIL – arrange for actual property ventures after which routed by way of defunct non-banking monetary firms to KFSL-NBFC to cowl up dangerous debt.
Loans diverted into shell cos to tide over losses
A big chunk of mortgage proceeds was transferred into shell insurance coverage firms, which indulged in speculative share buying and selling with Karvy Inventory Broking Ltd (KSBL) to tide over losses suffered by the brokerage agency.
The loans subsequently grew to become non-performing belongings (NPA) after the consumer’s securities had been launched as per orders of Nationwide Inventory Trade (NSE) and Securities Trade Board of India (SEBI). “A really complicated internet of monetary transactions, utilizing shell entities and NBFCs had been carried out and proceeds invested in share capital, short-term advances and loans to group firms, leading to enhancement of worth of subsidiary firms of KSBL. Now, the accused try to promote these subsidiary companies at revenue to acquire oblique windfall positive factors to the primary accused,” ED mentioned.
The company additionally acknowledged Parthasarthy ensured monetary advantages via group firms for his sons – Rajat Parthasarthy and Adhiraj Parthasarthy – within the type of wage, reimbursement of family bills, projecting proceeds of crime as untainted cash in fingers of relations.
Additional investigation revealed KDMSL managing director V Mahesh and a key managerial personnel of the Karvy group, is an in depth affiliate of Parthasarathy and he assisted and deliberate execution of cash laundering operations. To safeguard proceeds of crime from alienation, ED connected 110.7 crore of belongings and the overall attachment within the case is pegged at 2,095 crore, officers mentioned.