Karvy Group: ED attaches C Parthasarathy's Rs 110 Cr assets; total tally reaches Rs 2095 Cr

Hyderabad: Enforcement Directorate has attached another Rs 110 Crore worth of assets of Karvy Stock Broking Ltd (KSBL) and its Chairman Comandur Parthasarathy. The total assets attached so far are valued at Rs 2095 Crores. The properties are in a form of land, buildings, shareholdings, cash, foreign currency, and jewelry.

ED is probing the multi-crore money laundering against C Parthasarathy and Group CFO G Hari Krishna, who are presently on bail. ED initiated a money laundering investigation based on FIRs filed by the Hyderabad Police. The cops were acting on the plaints filed by bankers who complained that Karvy Group had availed huge loans by illegally pledging its clients' shares worth Rs 2800 Crore. The loans were later declared Non-Performing Assets.

Subsequently, after receiving the loans, the company chairman diverted it utilizing the services of high-ranking functionaries working under CMD.

Money was diverted to sister organizations for personal benefit

"Funds were diverted to real estate companies of the same group. These include KDMSL and KRIL. The diverted loan funds were routed via multiple defunct NBFCs to KFSL- NBFC to wash its bad debts. Large chunks of loan proceeds were transferred into Shell Insurance companies which did massive speculative share trading with KSBL as the Stock Broker and ostensibly suffered massive losses. The very complex web of financial transactions, using several shell entities and NBFCs" ED said in its statement.

A large amount of money has been used as share capital, short-term advances, and loans to group companies. This has resulted in the enhancement of the value of the subsidiary companies of KSBL. Before his arrest, Parathasarathi was trying to sell these subsidiary businesses at a profit to yield indirect windfall gains.

All in the family

Probe revealed that , C. Parthasarthy had made arrangement 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 crime were projected as 'untainted money' in the hands of the family members.

Further, V.Mahesh, MD of KDMSL, Senior official and KMP of the Karvy group is a close associate of C. Parthasathy and he actively assisted and planned the execution of money laundering operations.