The Enforcement Directorate has arrested C Parthasarathy and G Krishna Hari, CMDs of Karvy Group, in an alleged money laundering case related to fraud by Karvy Stock Broking Ltd valuing Rs 2874 crore through illegal diversion of clients’ securities. is arrested. Same as getting loan.
The Enforcement Directorate has said that Karvy had pledged these securities with banks and NBFCs for loans and subsequent loan defaults. The agency further said that it has got the arrested accused in custody for four days.
The Enforcement Directorate in a release said that it initiated money laundering probe against Karvy on the basis of an FIR registered by HDFC Bank with CCS Hyderabad Police on charges of cheating. Thereafter several other FIRs were filed by other banks and investors.
In September, Enforcement Directorate officials conducted a search operation at six locations linked to KSBL for alleged money laundering. An official release issued by the Enforcement Directorate said that it has attached the shares of Karvy Group. HDFC Bank alleged that KSBL had illegally pledged securities of its customers and had taken and diverted loans amounting to Rs 329 crore.
Shares of customers who did not owe any money to KSBL were also transferred to the firm’s pool account and were allegedly pledged with banks and NBFCs. The Enforcement Directorate alleged that the power of attorney given to the firm by the client to facilitate exchange settlement was misused on the instructions of the CMD and senior officials.
The borrowed funds were transferred to other group companies and then to 14 shell companies started by Karvy. Transactions from multiple accounts of group companies were made to layer up a complex web without any financial justification. Various financial advisors and dormant NBFCs were used to redistribute the funds.
“Furthermore, it has been found that KSBL has illegally transferred these shares to its account by pledging the shares of the clients of KSBL to the extent of Rs 400 crore loan from NBFCs in the name of five such shell companies,” the agency said. took.” The fraudulently obtained loans were used to liquidate other pending debts of related companies, for large-scale stock transactions and were diverted to personally held family companies. Earlier, the agency had frozen Parthasarathy’s shares worth Rs 700 crore.
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