The money laundering case was filed on the basis of FIRs by the Hyderabad Police Department following complaints from lending banks alleging that the Karvy Group had made large amounts of loans by illegally pledging their clients’ shares worth approximately ₹2,800 crore and the said loans are no longer valid -performing asset (NPA) after the release of the client’s securities according to the orders of NSE and Sebi.
“In order to protect the proceeds of crime from alienation, the Enforcement Directorate (ED) has identified and seized movable property for a total amount of ₹110.7 crore,” the investigative agency said in a statement.
With the last order, the total seizure of properties by the ED in this case stands at ₹2,095 crore.
“KSBL was one of the leading stock brokers in the country with millions of clients. The scam came to light after a limited inspection of KSBL conducted by the NSE in 2019 revealed that KSBL had not disclosed a DP account and the had credited funds raised by pledging client securities in 6 of his own bank accounts (Broker-own Account) instead of the broker-client account,” the ED had previously said.
A “very complex web” of financial transactions has been carried out, using various empty entities and non-banking financial firms (NBFCs), to hide the source of these funds in order to project them as unaffected funds, the ED had said. said.