ED freezes Rs 700 crore shares of Karvy Stock Broking – The New Indian Express

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Through Express news service

HYDERABAD: The Directorate of Enforcement (ED) issued an order freezing the shares of Karvy Stock Broking Limited (KSBL) valued at Rs 700 crore according to the valuation for the year 2019-20, following searches in the group offices and that of the offices and residences of its promoters.

The ED is investigating Karvy Group of Companies for its money laundering offense to the tune of Rs 2,873 crore.

The managing director learned that Karvy CMD C Parthasarathy was trying to transfer his shares in the group companies through private deals to other sources. So, in order to preserve the proceeds of crime, she made the decision.

The ED had conducted searches of various premises of the Karvy group of companies, related entities and the premises of C Parathasarathy, during which prosecution evidence in the form of property documents, personal diaries, devices e-mails, dumps of e-mails were seized.

How She Pledged Client Securities KSBL credited funds raised by pledging client securities to six of its own “securities brokerage accounts” instead of the “broker-client account” and also did not report those six own brokerage accounts held with various private banks to SEBI.

At first glance, a net amount of Rs 1,096 crore was transferred by KSBL to its group company Karvy Realty (India) (KRIL), for the period from April 1, 2016 to October 19, 2019.

So far, investigations have revealed that KSBL did not report Crowdfunding Account (DP), Karvy Stock Broking, to the BSE in its January 2019 to August 2019 statements to regulators and exchanges.

In addition, KSBL fraudulently transferred shares belonging to its clients to its own demat account, which is not disclosed to the stock exchanges, and pledged the shares held in these accounts with the lending banks – HDFC Bank, ICICI Bank, IndusInd Bank and Axis Bank.

It also emerged that recently, deletion of files and e-mails from computer servers using anti-legal tools had been carried out, under the instructions of C Parthasarathy, who was arrested by the police of the city ​​of Hyderabad.

CMD IS TRYING TO UNLOAD SHARES

CMD C Parthasarathy was trying to get rid of his shares in group companies, ED discovered following searches of his home

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