ED attaches assets worth Rs 110 crore in money laundering case

ED attaches assets worth Rs 110 crore in money laundering case

Photo: BCCL

The Enforcement Directorate (ED) has seized movable and immovable property worth Rs 110 crore in connection with a money laundering investigation against Karvy Stock Broking.
Assets seized include land, buildings, equity interests, cash, currency and jewellery. The ED had filed a complaint under the Prevention of Money Laundering Act (PMLA) against KSBL and its Managing Director (CMD) Comandur Parthasarathy and others.
The case was filed based on FIRs by Hyderabad Police on complaints from lending banks who alleged that Karvy Group had taken out loans by illegally pledging their clients’ shares worth around 2,800 crores of rupees and the said loans became NPA after the release of the securities of the client according to the orders of NSE and SEBI.

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Subsequently, the loans were embezzled by a set of high officials working under the general control of Parthasarthy.

The federal agency had earlier attached assets worth Rs 1,985 crore in the deal. C Parthasarathy and Group CFO G Hari Krishna were arrested earlier by ED and are currently out on bail.

The proceeds from the large loans were transferred to shell insurance companies which carried out huge stock speculative trades with Karvy Stock Broking as stockbroker, and apparently suffered massive losses. “A highly complex network of financial transactions, utilizing multiple shell entities and NBFCs, large amounts of proceeds of crime were ‘invested’ infusing in the form of investments/share capital/short term advances/loans to group companies “, said the ED in a press release.

This resulted in the increase in value of Karvy’s subsidiaries.

Partharasarathy allegedly made arrangements through his group companies to pay financial benefits to his children, Rajat Partharasarathy and Adhiraj Partharasarathy, in the form of salary and reimbursement of household expenses and the proceeds of crime were projected as l uncontaminated money in the hands of family members. .