ED Attaches Assets Worth Rs134.02 Crore from Karvy's C Parthasarathy, Rs70.39 Crore from Wadhawans of DHFL
Moneylife Digital Team 26 October 2023
The enforcement directorate (ED) has provisionally attached assets worth Rs134.02 crore from C Parthasarathy, chairman and managing director (CMD) of Karvy Stock Broking Ltd (KSBL) and assets worth Rs70.39 crore belonging to the Wadhawan brothers.
In a tweet, ED says it attached assets worth Rs134.02 crore in the form of 1,000 non-convertible redeemable preference shares with a face value Rs200 each of KFin Technologies Ltd (KFintech) held in the name of son of Mr Parthasarathy under the Prevention of Money Laundering Act (PMLA) and total attachment in the KSBL case stands at Rs2,229.56 crore.
In June this year, Securities and Exchange Board of India (SEBI) cancelled the certificate of registration of KSBL. In its forensic audit report (FAR), Ernst & Young LLP (EY) found that KSBL had an outstanding loan against securities (LAS) facility of Rs789.41 crore in September 2016 with an overall borrowing of Rs1,051.36 crore. KSBL's borrowing increased to Rs2.032.67 crore on 30 September 2019 from Rs1,051.36 crore on 30 September 2016.
Pledging of securities by KSBL was increased substantially to Rs1,855 crore by 31 March 2018 from Rs202 crore (value of securities as of 30 June 2017). It was increased further to Rs2,700 crore by 30 September 2019, FAR says. (Read: SEBI Imposes Rs1.9 Crore Penalty on Karvy Stock Broking's Ex-officials for Misappropriating Clients' Securities)
Separately, ED says it attached assets worth Rs70.39 crore under the provisions of PMLA, belonging to Kapil Wadhawan and Dheeraj Wadhawan, the promoters of Dewan Housing Finance Ltd (DHFL). The action is related to DHFL and Union Bank of India fraud case. "The attached assets are in the form of paintings and sculptures worth Rs28.58 crore, watches worth Rs5 crore, diamond jewellery worth Rs10.71 crore, 20% stake in a helicopter to the tune of Rs9 crore and two flats in Bandra worth Rs17.10 crore. Total attachment in this case stands at about Rs2,095.94 crore." ED says.
After dilly-dallying for over two years, the IDBI Bank Ltd in March this year, finally declared the DHFL promoters and siblings -- Kapil Wadhawan and Dheeraj Wadhawan -- as 'wilful defaulters' in a Rs758 crore unpaid loans case.
The Union Bank of India (UBI), leader of a 17-bank consortium, including the IDBI Bank, had lodged a complaint against the DHFL, Wadhawan siblings and others who allegedly hatched a criminal conspiracy to defraud the banks of a staggering amount of around Rs 43,000 crore.
Based on the UBI's complaint, the central bureau of investigation (CBI) filed its first information report (FIR) in June 2022 against the Wadhawans, DHFL and others.
The CBI had said that the plot by the accused Wadhawan brothers and others induced the consortium of banks, mostly public sector banks (PSBs), to release huge loans totalling Rs42,871.42 crore.
A significant portion of the loans was allegedly siphoned off or misappropriated by falsifying the DHFL's books of accounts, dishonestly defaulting on the repayments to the lenders, and causing a wrongful loss of Rs34,615 crore. 
DHFL became a defaulter in May 2019, and the banks classified it as a non-performing asset (NPA) between October -December 2019 and then declared it as 'fraud' from March 2020 onwards. (Read: DHFL: 7 Police Suspended for Giving Special Treatment to Wadhawan Brothers, say Reports)
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