Hyderabad: ED freezes Karvy shares held by its top honchos

Hyderabad: In further action against Karvy Stock Broking Limited (KSBL), the Enforcement Directorate (ED) has issued freezing order in respect of shares of the group held directly and indirectly by the Chairman and Managing Director of M/s KSBL, Comandur Parthasarathy, his sons, Rajat Parthasarathy and Adhiraj Parthasarathy, and their entities in order to safeguard the proceeds of the crime.

The development comes in the wake of search operations on Wednesday at six locations connected to KSBL under PMLA 2002.

The ED had conducted search operations on various premises of Karvy Group of Companies, connected entities and at the residential premises of C Parathasarathy. During the course of search, several incriminating evidences in the form of property documents, personal diaries, electronic devices, email dumps etc have been seized and were being analysed, ED officials stated on Saturday.

It is reliably learnt that C Parthasarathy was 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 Friday under PMLA 2002, and the estimated value of these shares has been arrived at Rs 700 crore as per the valuation for the year 2019-20, the ED officials stated.

It may be noted that ED had initiated money laundering investigation on the basis of FIRs registered by Telangana police on the complaint of HDFC Bank alleging that 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, Hyderabad police, for defrauding IndusInd Bank to the tune of Rs 137 crore and one more FIR has been registered by the Cyberabad Police, Hyderabad, for defrauding ICICI Bank to the tune of Rs 562.5 crore.

KSBL under the leadership of C Parthasarathy had committed gross irregularities and all the illegally taken loans have become Non-Performing Assets. It is learnt that more FIRs are being registered by other banks and also individual shareholders/investors. The total loan proceeds taken from multiple banks using the same modus operandi is around Rs 2,873 crore, a statement issued by ED on Saturday said.

Further, KSBL did large scale trading activities in the name of nine companies that included Karvy Consultants Limited, which is a group company of Karvy, and eight other shell companies, in the guise of doing insurance business. During the course of investigation conducted under PMLA, it also came to light that several crores 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. The bank statement analysis of these companies revealed that there was large value rotation of funds between the Karvy Group of Companies and the shell companies' bank accounts. Earlier, the ED had recorded the statement of C Parthasarathy in Chanchalguda Jail. Further investigation is in progress.