ED raids six locations in KSBL fraud case, seizes shares worth crores of rupees

The Enforcement Directorate (ED) on Saturday conducted a search operation at six locations and seized shares worth crores. The search operation has been carried out in connection to the controversial Karvy Stock Broking Private Limited (KSBL) fraud case. The ED has also seized shares worth around Rs 700 crore by the company chairman C Parthasarathy and his family, informed ANI. 

Over the past few days, several developments have surfaced regarding the KSBL fraud case. Earlier on September 21, the Vice President and Risk Head of the company were arrested by the Hyderabad Police in connection with illegal retail trading in nine shell companies followed by raids in six more locations on September 22.

So far the Hyderabad Police has arrested three concerned officials with the company which includes KSBL Secretary Y Sailaja, Chief Financial Officer G Krishna Hari, and Chief Operating Officer, Rajiv Ranjan Singh. 

Complaint against Karvy Stock Broking Private Limited

The case dates back to the month of August when a complaint case was filed by the ICICI Bank against Karvy Stock Broking Limited promoter C Parthasarathy and others for allegedly cheating a huge amount of around Rs 563 crore. Later, a press release was issued by the police which stated that the case was booked under sections of the Indian Penal Code, 406 (criminal breach of trust), 420 r/w 34 (cheating).

Providing details on the alleged fraud, the police said that the KSBL transferred the funds to the company's own bank account instead of the stockbroker client's account. The police statement further said, "All pledges on securities were closed without approval, and securities were transferred to end clients of KSBL thereby severely impacting the security of all lenders including ICICI Bank." 

Chairman of KSBL accused in the case of defaulting

In connection with the case, the chairman of the Karvy Stock Broking Private Limited C Parthasarathy was also arrested on August 19 on the charges of defaulting Rs 137 crore from IndusInd Bank. He was later interrogated by the Enforcement Directorate and then was sent to seven-day judicial custody. 

It was reported that Parthasarathy along with G Krishna Hari and Rajiv Ranjan Singh executed the overall legal plan and monitored everything. 

(With agency inputs, Image: ANI/PTI)