Rs 700-cr shares frozen after raids on Karvy stock broking CMD Parthasarathy ED
New Delhi Sep 25 PTI The Enforcement Directorate ED on Saturday said it has frozen shares worth Rs 700 crore after raids against Karvy Stock Broking Limited KSBL CMD C Parthasarathy and others as part of a money laundering investigation against themHeis currently lodged in the Chanchalguda jail of Hyderabad after being arrested by the Telangana Police last month The ED searches were carried out on September 22 at six locations in Hyderabad and on various premises of Karvy group of companies connected entities and the residential premises of C Parthasarathy the agency said in a statementSeveral incriminating evidences in the form of property documents personal diaries electronic devices email dumps etc have been seized and are being analysed it saidIt is reliably learnt that C Parthasarathy is trying to off-load his shares in the group companies through private deals and thus in order to preserve the proceeds of crime till further investigation ED has issued a freezing order on September 24 and the estimated value of these shares has been arrived at Rs 700 crore as per the valuation for the year 2019-20 it saidThese shares of the Karvy group are being held directly and indirectly by CMD Comandur Parthasarathy his sons Rajat Parthasarathy and Adhiraj Parthasarathy and their entities The ED case filed under the criminal provisions of the Prevention of Money Laundering Act PMLA is based on a Telangana Police FIR alleging KSBL had illegally pledged the securities of its clients and taken a loan of Rs 329 crore and diverted the same Another FIR has been registered by central crime station of Hyderabad Police for defrauding IndusInd Bank to the tune of Rs 137 crore and one more FIR has been registered by Cyberabad Police authorities for defrauding ICICI Bank to the tune of Rs 5625 crore it saidThe ED has clubbed all these FIRs as part of its probe and has also recorded the statement of C Parthasarathy in jailKSBL under the leadership of C Parthasarathy had committed gross irregularities and all the illegally taken loans have become NPA the agency saidIt is learnt that more FIRs are being registered by other banks and also individual shareholders investors the ED saidThe total loan proceeds taken from multiple banks using the same modus operandi is around Rs 2873 crore it said adding that theNSE and SEBI are also investigating the affairs of KSBLThe agency said its probe found that KSBL did not report the depository participatory or DP account no 11458979 named KARVY STOCK BROKING LTD BSE in the filings made from January-August 2019 with regulatorsexchanges KSBL fraudulently transferred shares belonging to its clients to its own demat account which is not disclosed to the exchanges and pledged the shares held in these accounts with the lendersbanks HDFC bank ICICI bank IndusInd bank Axis Bank etc The securities lying in the aforesaid DP account of KSBL actually belonged to the clients who wereare the legitimate owners of the pledged securities the agency saidIt said KSBL did not have any legal right to create a pledge on these securities and generate funds The quantum of such loans taken by KSBL from illegal pledge of shares is to the tune of Rs 2873 crore KSBL credited the funds raised by pledging of client securities to 6 of its own bank accounts stock broker-own account instead of the Stock Broker-Client Account and further has not reported these 6 own bank accounts stock broker-own account held with various private banks to the Sebi it allegedPrima facie the ED said a net amount of Rs 1096 crore was transferred by KSBL to its group company–Karvy Realty India Ltd– between April 1 2016 to October 19 2019 It accused KSBL of conducting large-scale trading activities in the names of 9 companies that included Karvy Consultants Limited KCL which is a group company of Karvy and 8 other shell companies in the guise of doing insurance business Several crore of rupees were diverted for acquiring immovable properties through the group company KRIL and to other group companies as well It also came to light that recently deletion of files and emails from the computer servers by using anti-forensic tools had been done under the instructions of C Parthasarathy it claimedThe bank statement analysis of these companies revealed that there is large value rotation of funds between the Karvy group companies and the bank accounts of certain shell companiesPTI NES TIR TIR
New Delhi Sep 25 PTI The Enforcement Directorate ED on Saturday said it has frozen shares worth Rs 700 crore after raids against Karvy Stock Broking Limited KSBL CMD C Parthasarathy and others as part of a money laundering investigation against themHeis currently lodged in the Chanchalguda jail of Hyderabad after being arrested by the Telangana Police last month The ED searches were carried out on September 22 at six locations in Hyderabad and on various premises of Karvy group of companies connected entities and the residential premises of C Parthasarathy the agency said in a statementSeveral incriminating evidences in the form of property documents personal diaries electronic devices email dumps etc have been seized and are being analysed it saidIt is reliably learnt that C Parthasarathy is trying to off-load his shares in the group companies through private deals and thus in order to preserve the proceeds of crime till further investigation ED has issued a freezing order on September 24 and the estimated value of these shares has been arrived at Rs 700 crore as per the valuation for the year 2019-20 it saidThese shares of the Karvy group are being held directly and indirectly by CMD Comandur Parthasarathy his sons Rajat Parthasarathy and Adhiraj Parthasarathy and their entities The ED case filed under the criminal provisions of the Prevention of Money Laundering Act PMLA is based on a Telangana Police FIR alleging KSBL had illegally pledged the securities of its clients and taken a loan of Rs 329 crore and diverted the same Another FIR has been registered by central crime station of Hyderabad Police for defrauding IndusInd Bank to the tune of Rs 137 crore and one more FIR has been registered by Cyberabad Police authorities for defrauding ICICI Bank to the tune of Rs 5625 crore it saidThe ED has clubbed all these FIRs as part of its probe and has also recorded the statement of C Parthasarathy in jailKSBL under the leadership of C Parthasarathy had committed gross irregularities and all the illegally taken loans have become NPA the agency saidIt is learnt that more FIRs are being registered by other banks and also individual shareholders investors the ED saidThe total loan proceeds taken from multiple banks using the same modus operandi is around Rs 2873 crore it said adding that theNSE and SEBI are also investigating the affairs of KSBLThe agency said its probe found that KSBL did not report the depository participatory or DP account no 11458979 named KARVY STOCK BROKING LTD BSE in the filings made from January-August 2019 with regulatorsexchanges KSBL fraudulently transferred shares belonging to its clients to its own demat account which is not disclosed to the exchanges and pledged the shares held in these accounts with the lendersbanks HDFC bank ICICI bank IndusInd bank Axis Bank etc The securities lying in the aforesaid DP account of KSBL actually belonged to the clients who wereare the legitimate owners of the pledged securities the agency saidIt said KSBL did not have any legal right to create a pledge on these securities and generate funds The quantum of such loans taken by KSBL from illegal pledge of shares is to the tune of Rs 2873 crore KSBL credited the funds raised by pledging of client securities to 6 of its own bank accounts stock broker-own account instead of the Stock Broker-Client Account and further has not reported these 6 own bank accounts stock broker-own account held with various private banks to the Sebi it allegedPrima facie the ED said a net amount of Rs 1096 crore was transferred by KSBL to its group company–Karvy Realty India Ltd– between April 1 2016 to October 19 2019 It accused KSBL of conducting large-scale trading activities in the names of 9 companies that included Karvy Consultants Limited KCL which is a group company of Karvy and 8 other shell companies in the guise of doing insurance business Several crore of rupees were diverted for acquiring immovable properties through the group company KRIL and to other group companies as well It also came to light that recently deletion of files and emails from the computer servers by using anti-forensic tools had been done under the instructions of C Parthasarathy it claimedThe bank statement analysis of these companies revealed that there is large value rotation of funds between the Karvy group companies and the bank accounts of certain shell companiesPTI NES TIR TIR
