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ED Attaches Assets Worth Rs 110 Crore In Karvy Scam

The ED had previously attached assets worth Rs 1,984.84 crore in the same case.
Hyderabad | 30th July 2022
The Enforcement Directorate (ED) today identified additional assets and provisionally attached properties in the form of lands, buildings, share holdings, cash, foreign currency and jewellery worth Rs 110 crore under the Prevention of Money Laundering Act (PMLA), 2002, in the money laundering investigation against M/s Karvy Stock Broking Ltd (KSBL) and its Chairman Comandur Parthasarathy and others.

The ED had previously attached assets worth Rs 1,984.84 crore in the same case.

Parthasarathy and Group CFO G Hari Krishna were arrested by the ED and are currently on bail.

According to a release issued by the officials, the ED initiated money laundering investigation on the basis of FIRs filed by the CCS Hyderabad Police on the complaints by banks that the Karvy group had availed itself of huge amounts of loans by illegally pledging its clients' shares worth about Rs 2,800 crore, and that the said loans had become NPAs after the release of the clients' securities as per the orders of the NSE & the SEBI.

The loans were diverted from the stated purpose by a set of high-ranking functionaries working under the overall control of the CMD. The funds were diverted to related companies like KDMSL and KRIL which was set up for real estate ventures. The diverted funds were routed via multiple defunct NBFCs to KFSL-NBFC to wash off its bad debts, and large chunks of the loan proceeds were transferred into shell insurance companies which did massive speculative share trading with KSBL as the stock broker and ostensibly suffered massive losses.

Parthasarthy had also made arrangements through his group companies to pay financial benefits to his sons Rajat Parthasarthy and Adhiraj Parthasarthy in the guise of salaries and reimbursement of household expenses, and thus the proceeds of the crime were projected as untainted money in the hands of the family members, officials said.

Further, investigation revealed that V Mahesh, MD of KDMSL, and a senior official and KMP of the Karvy group, was a close associate of Parthasarathy, and had actively assisted in and planned the execution of the money-laundering operations.

In order to safeguard the proceeds of the crime from alienation, the ED identified and seized movable assets totalling Rs 110.7 crore.

The a total attachment of Rs 2,095 crore has been done in this case.

Further investigations are in progress.
filed in:  Scams, Crimes, Business Crimes, Karvy, Enforcement Directorate
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