The Enforcement Directorate (ED) on Saturday said it has frozen shares worth Rs 700 crore of Karvy Stock Broking Limited (KSBL) CMD C Parthasarathy and others as part of a money laundering investigation against the firm and its promoters.
Parthasarathy is currently lodged in the Chanchalguda jail of Hyderabad after being arrested by the Telangana Police last month.
On September 22, the ED had conducted searches 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 statement.
“Several incriminating evidences in the form of property documents, personal diaries, electronic devices, email dumps, etc have been seized and are being analysed,” it said.
“It 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 said.
These 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 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 562.5 crore,” it said.
The ED has clubbed all these FIRs as part of its probe and has also recorded the statement of C Parthasarathy in jail.
KSBL under the leadership of C Parthasarathy had committed “gross irregularities” and all the illegally taken loans have become NPA, the agency said.
The total loan proceeds taken from multiple banks using the same modus operandi is around Rs 2,873 crore, it said, adding that the NSE and SEBI are also investigating the affairs of KSBL.
Prima facie, the ED said, a net amount of Rs 1,096 crore was transferred by KSBL to its group company—Karvy Realty (India) Ltd— between April 1, 2016 and October 19, 2019, it added.