New Delhi: The Enforcement Directorate (ED) on Wednesday conducted raids at multiple locations in Hyderabad and other places across India in connection with its money laundering probe against Karvy Stock Broking Limited (KSBL).
The agency carried out these searches days after it recorded the statement of incarcerated KSBL Chairman and Managing Director (CMD) C Parthasarathi in connection with a money laundering case, said an official source requesting anonymity.
“The searches were conducted at the office and residential premises linked to KSBL, its CMD as well as other arrested people,” the source added.
ED’s move comes after its officials recorded the statement of prime accused Parthasarathi in Hyderabad-based Chanchalguda Central Jail on September 5 after obtaining court orders. The ED officials questioned Parthasarathi next two days also.
The probe agency had registered a case under the Prevention of Money Laundering Act (PMLA) based on an FIR issued by Hyderabad police’s Central Crime Station (CCS).
On the complainant of IndusInd Bank, Hyderabad, a case was registered at the CCS detective department (DD) against Karvy over the allegation of availing credit facilities of Rs 137 crore from the bank by pledging securities or shares of its clients in contravention to SEBI guidelines.
KSBL diverted funds raised through alleged fraud into its own and connected business entities.
The CSS has registered four cases so far against Karvy for cheating IndusInd Bank, HDFC Bank and clients.
It is alleged that the accused suppressed the fact that the pledged securities belong to the clients and was done without their consent, misusing power of attorney.
The securities were transferred into the Demat account of Karvy and pledged for margin and short-term requirements, said sources.
“The accused became a defaulter by diverting the funds into their own owns and those connected to business entities,” they added.
Similarly, HDFC Bank was also allegedly duped to the tune of Rs 359 crore.
Two other people besides Parthasarathi were arrested by the CCS in connection with the case.