Karvy Stock Broking case: CMD and CFO remanded in ED custody until Jan 30

The Enforcement Directorate (ED) on Thursday knowledgeable that Karvy Group CMD Comandur Parthasarathy and CFO G Krishna Hari had been produced earlier than the PMLA Special Court MSJ Hyderabad on January 20, 2022, and the Court has remanded each the CMD and CFO to 4 days of ED custody from January 27-30, 2022.
In an announcement, the monetary investigation company stated that it initiated cash laundering investigation primarily based on the FIR filed by HDFC Bank with CCS Hyderabad Police underneath numerous sections of IPC for defrauding HDFC Bank. Subsequently, extra FIRs have been filed by different banks and some buyers. The company recorded the assertion of varied workers of the Karvy Group, and performed searches at 9 places on September 22, 2021, and uncovered the advanced internet of transactions designed by the senior administration of the Karvy Group to misuse the securities of their shoppers and to lift loans fraudulently which had been then rotated by way of a number of associated firms and diverted away from the said objective.
“The shares of clients who did not owe any funds to KSBL were also transferred to the margin/ pool Account of KSBL and were pledged with the banks/ NBFCs. The Power Of Attorney (POA) given by clients to KSBL to facilitate exchange settlements was grossly misused by KSBL at the directions of the CMD and senior executives,” the ED assertion stated.
Parthasarathy and Hari had been the primary conspirators who gave directions to others, the company stated including that “fund trail investigation has shown that the borrowed funds were transferred to other group companies, particularly to one WoS of KSBL i.e. M/s. Karvy Realty (India) Limited (KRIL) and then to 14 shell companies floated by Karvy Group. The same have been further diverted by layering done through complex web of transactions from the several accounts of group companies without any financial rationale.”
Various monetary consultants and defunct NBFCs had been used to route the funds. Further, the ED discovered that Karvy Stock Broking availed loans from NBFCs to the tune of Rs 400 crore within the identify of 5 such shell firms by pledging shares of shoppers of KSBL after illegally transferring these shares to their account. The fraudulently availed loans had been used to clear the pending loans of associated firms, do large inventory transactions which have allegedly was full losses and diverted to personally held household firms.
The ED had earlier frozen share holding of Parthasarathy value round Rs 700 crore and is investigating the cash path to hint the proceeds of crime that are near round Rs 2000 crore. Further investigation is occurring.