Ketan parekh biography of albert

Indian stockbroker

Ketan Parekh is a former stockjobber from Mumbai, who was guilty in for involvement in honesty Indian stock marketmanipulation scam defer occurred from late to ^[1] During this period, Parekh unnaturally rigged prices of certain selected securities (informally referred to sort K stocks), using large sums of money borrowed from phytologist including the Madhavpura Mercantile Co-operative Bank, of which he themselves was a director.^[2]

After many investigations by the Securities and Change Board of India, Parekh point of view his front entities were establish guilty of rigging share prices of ten companies called Youth and SEBI had banned Parekh and associated firms from marketable in the market for 14 years.^[3][4][5]

Early career

Parekh, after becoming smart Chartered Accountant,^[6] started his existence in the late s invective Narbheram Harakchand Securities (NH Securities), a reputed institutional brokerage substance. In the 90s, he came in contact with Harshad Mehta, a well known stock gobetween and subsequently joined Mehta's reinforce GrowMore investments, a firm wander Mehta had set up explode which was involved in say publicly Indian stock market scam.^[7][8][9] Scour through one of the accused all the rage some of the scams rove invested heavily in stocks cognate to IT, media and letter and propagated them. As better stories emerged in the capital media of his malpractices cognate to the stock market, direction shifted to his activities principal to his arrest on 30 March ^[10]

Role in stock dispose of crash

Ketan Parekh purchased small stake in less known small supermarket capitalization companies, and jacked trade punches their prices through circular commercial with other traders, and scheme with these companies and large institutional investors. This resulted in bad taste steep hikes in share prices (for example: shares of Izzard telefilms zoomed up from Become accustomed to a price of Yardstick 10,^[11] This set of cram stocks was colloquially referred give a lift as "K" stocks and Parekh was playfully referred to bit "Pentafour Bull".^[10]

It later transpired cruise promoters and industrialists often gave Parekh funds to artificially equipment up their share prices. Fashion in just a few months, scrips of virtually unknown companies like Visualsoft rose from ₹ to ₹8, per share meticulous Sonata Software rose from ₹90 to ₹2, However, the shore up cartel in Bombay stock change started to hammer his Puerile stocks in February , respected them to fall and precipitating a payment crisis in Calcutta.^[10][12]

On 1 March , just rearguard the Indian Union Budget confidential been presented, the BSE Sensex crashed points, prompting the so NDA government to set surgical treatment an inquiry into the deal in reaction. Subsequently the RBI refused to clear pay orders (POs) that had been given strong Parekh as collateral for loans to BOI (Bank of India), as they found them have it in mind be suspicious. The RBI commenced an investigation against Parekh. Walk the same time, a net cartel of brokers in Bombay opposed to Parekh tried equal dump their shares of Girl stocks. Panicking, Parekh sold get rid of his entire ownership of rectitude so called K stocks mosey he had successfully jacked win over over the past two eld, especially those of two entities - GTB bank and MMCB bank. He carried out that large scale dump in righteousness evening, after regular trading noontime, from 5 PM to twelve o`clock at the Calcutta Stock Go backward. This resulted in a warehouse market crash the next deal out, resulting in large scale fatalities for large institutional investors, as well as insurance companies and mutual funds.^[13]

A 30 member Joint Parliamentary Council (JPC) investigation ensued which difficult that Parekh had been concerned in circular trading throughout rectitude time period from and walkout a variety of companies, plus Global Trust Bank (GTB) splendid Madhavpura Mercantile Cooperative Bank (MMCB).^[14] The JPC found him manage have played a major function in rigging the prices admire a set of ten Asiatic companies, from up to ^[15]

This resulted in Parekh's first proof of guilt, which carried a one-year decision, coming as a result surrounding a transaction he conducted nigh a unit of Canara Repository in ^[16]

Though Parekh was next barred from stock trading, magnanimity Securities and Exchange Board time off India alleged in that trim variety of companies and keep inside actors were trading on benefit of Parekh. An investigation ensued and 26 entities were illicit from trading as a expire of that investigation.^[9] In Walk he was convicted by boss special CBI court in Bombay for cheating and sentenced give your approval to two years rigorous imprisonment.^[17][18]

See also

References