Karvy Scam: ED attaches assets worth ₹110 cr

The Enforcement Directorate (ED) on Saturday said it has attached fresh assets worth over ₹110 crore in connection with its money laundering probe against Karvy Stock Broking (KSBL), its CMD C Parthasarathy and others.

The money-laundering case was filed based on FIRs by the Hyderabad Police on the complaints of lending banks who alleged the Karvy Group had availed large amounts of loans by illegally pledging their clients’ shares worth about ₹2,800 crore and the said loans have become non-performing asset (NPA) after the release of the client’s securities as per the orders of NSE and Sebi.

“In order to safeguard the proceeds of crime from alienation, the Enforcement Directorate (ED) has identified and attached movable assets totalling ₹110.7 crore,” the probe agency said in a statement.

With the latest order, the total attachment of properties by the ED in this case stands at ₹2,095 crore.

“KSBL was one of the leading stock brokers in the country with millions of clients. The scam came to light after a limited purpose inspection of KSBL conducted by the NSE in 2019 revealed that KSBL had not revealed a DP Account and credited the funds raised by pledging of client securities to 6 of its own bank accounts (Stock Broker-own Account) instead of the stock broker-client account,” the ED had said earlier.

A “very complex web” of financial transactions, using several shell entities and non-banking financial companies (NBFCs), have been executed to conceal the source of these funds to project them as untainted funds, the ED had said.

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Harry Byrne

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