CMD of Karvy Stockbroking seized 700 crore shares in the raid there

Carvy Group erroneously borrows Rs 2,873 crore from various banks by mortgaging clients' accounts

New Delhi: The ED on Saturday said that 700 crore shares of Karvi Stock Broking (KSBL) CMD C Parthasarathy and others were seized in a raid there. The raids were carried out as part of a money laundering probe against him. Parthasarathy was arrested by Telangana police last month and is currently lodged in Hyderabad's Chanchalguda jail. The ED had raided various companies and complexes of the Carvy Group of Companies at six locations in Hyderabad since September 4. Units and residential complexes belonging to Jo Joj-Jode C Parthasarathi were raided.

He said property documents, personal diaries, electronic devices, e-mail dumps etc. were seized and a lot of evidence was found in them and is being analyzed.

He said it was learned from reliable sources that the shares of C Parthasarathy Group of Companies were to be sold through private deals and the ED had obtained a freezing order against them on September 24 to stop them from doing so. The estimated value of the seized shares for the year 2019-20 is Rs 700 crore.

These shares of Karvi Group were directly and indirectly owned by CMD Parthasarathy and his sons Rajat Parthasarathy and Adhirraj Parthasarathy and its units. The ED has registered a case under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR lodged by the Telangana police. KSBL has been accused of taking a loan of Rs 329 crore by mortgaging the securities of its customers.

Another FIR against him is alleging fraud of Rs 15 crore with IndusInd Bank. While the Cyberabad police authorities have registered a complaint against him for fraud of Rs 2 crore from ICICI Bank. He has thus taken loans totaling Rs 2,873 crore from various banks. Surprisingly, he mortgaged the shares of the client's account and deposited the amount in his own account. The ED said that at first glance, a net amount of Rs 1,096 crore was transferred by KSBL to its group company Carvy Realty (India) Limited between April 1, 2016 and October 19, 2019.

KSBL was conducting large scale trading activities under the name of Carvey Consultants Limited by a total of nine companies. He was pretending to be in the insurance business to cover the business. Crores of rupees were used by group companies to buy fixed assets. In addition, files and e-mails were recently removed from the computer server using anti-forensic tools as per Parthasarathy's instructions.