The Enforcement Directorate has frozen shares worth ₹700 crore of Karvy Group held by the company’s Chairman and Managing Director C Parthasarathy and his family.
“ED has conducted search operation at six locations of Karvy Stock Broking Limited under PMLA, 2002 in a bank fraud case. Subsequently, freezed shares worth ₹700 crore of Karvy Group, held directly and indirectly by C Parthasarathy and his family,” the investigating agency said.
“Several incriminating pieces of evidence in the form of property documents, personal diaries, electronic devices, email dumps, etc have been seized and are being analysed,” it said.
“It is reliably learnt that C Parthasarathy is trying to off-load his shares in the group companies through private deals and thus, in order to preserve the proceeds of crime till further investigation, ED has issued a freezing order on September 24 and the estimated value of these shares has been arrived at ₹700 crore as per the valuation for 2019-20,” the ED added.
Parthasarathy was recently arrested by the Central Crime Station in Hyderabad on charges of defrauding several banks and evading payments.
The Karvy Group is under scanner in other cases, too, including a similar case filed by HDFC Bank.
Allegation
In their complaint earlier, the banks had alleged that the Karvy Group, through its stockbroking arm, had pledged the shares of its clients and raised loans, the proceeds of which were diverted to other firms.
Karvy defaulted on the loans, according to the complaint. While the Karvy Group had defaulted about ₹350 crore in the case of HDFC Bank, it was about ₹137 crore for IndusInd Bank.
The scam-hit Karvy Stock Broking was in 2020 declared a defaulter by the BSE and its membership as a brokerage was suspended.
It was also barred from taking new clients as it had allegedly misused over ₹2,000 crore worth of securities of its clients.