ED attaches Rs 110-Cr property in Karvy Scam, total attachments put at Rs 2,095 Cr

HYDERABAD: The Enforcement Directorate (ED) identified additional assets and has 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 Karvy Stock Broking Ltd (KSBL) and its Chairman Comandur Parthasarathy and others, on Saturday, taking total attachment to Rs 2,095 crore.

The ED had previously attached assets worth Rs 1,984.84 crore in the same case. C Parthasarathy and Group CFO G Hari Krishna were arrested by the ED and are presently on bail.

The ED had initiated a money laundering investigation on the basis of FIRs filed by the Central Crime Station (CCS), Hyderabad Police, on the complaints of lending Banks who had said that the Karvy Group had availed large amounts of loans by illegally pledging their clients' shares worth about Rs 2,800 Crore.

The Karvy group said the loans became Non-Performing Assets (NPA) after the release of the client's securities as per the orders of National Stock Exchange and Securities and Exchange Board of India (SEBI).

Subsequently, the loans were diverted to related companies. Large amounts of proceeds of the crime have been 'invested' by infusing in the form of investments/share capital/short term advances/loans to group companies. Now the accused were trying to sell these subsidiary businesses at a profit to yield indirect windfall gains to the main accused.

C. Parthasarthy had made arrangements through his group companies to pay financial benefits to his sons, Rajat Parthasarthy and Adhiraj Parthasarthy, in the garb of salary and reimbursement of household expenses and thus the proceeds of the crime were projected as untainted money in the hands of the family members, according to a press release by the ED.

Further investigation revealed that V.Mahesh, Managing Director of KDMSL was a close associate of C. Parthasathy and he actively assisted and planned the execution of money laundering operations.

In order to safeguard the proceeds of crime from alienation, the ED had identified and attached and seized movable assets totaling to Rs 110.70 Crore. Further investigation is in progress.