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HomeEconomic FraudKarvy Money Laundering Probe: Enforcement Directorate Raids Multiple Locations Including Hyderabad

Karvy Money Laundering Probe: Enforcement Directorate Raids Multiple Locations Including Hyderabad

NEW DELHI: The Enforcement Directorate (ED) conducted raids at several locations in Hyderabad and other parts of the country on Wednesday in connection with its money-laundering investigation against Karvy Stock Broking Limited (KSBL).

In conjunction with the money-laundering investigation, one of the promoters of the scam-hit Karvy Group was previously arrested on allegations of failing to repay a bank loan. The arrest was made in response to a complaint filed by IndusInd Bank.

According to an official source who requested anonymity, the agency conducted these searches just days after recording the statement of detained KSBL Chairman and Managing Director (CMD) C Parthasarathi in connection with a money laundering case.

The bank had reported that the Karvy group, represented by Parthasarathy, had illegally pledged its clients’ shares and obtained credit. The loan funds were moved to other businesses, which then failed on payments.

Karvy was stopped from accepting new brokerage clients in November 2019 after it was discovered that the brokerage business had allegedly exploited clients’ securities to the tune of over 2,000 crore.

Karvy has also been barred from transferring any of its assets, except with the prior approval of the National Stock Exchange (NSE), until investor claims are settled.

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