Ketan Parekh held in Rs 120 cr stock scam case

TNN | Dec 2, 2002, 07.59 PM IST

KOLKATA: Stock broker Ketan Parekh was arrested on Monday by a team of
the Kolkata police from his office near Dalal Street for his alleged
involvement in last year's Rs 120-crore scam at the Calcutta Stock Exchange.
Parekh was arrested at around 4 p.m. and taken to the MRA police station
near Crawford market for interrogation. He will be produced in the Esplanade
court around 11 a.m. on Tuesday before being taken to Kolkata, where an FIR
was registered against him by the Calcutta exchange in September.
According to the police, Parekh's arrest came close on the heels of the
dentention of his associates in Kolkata, Dinesh Singhania, Harish Biyani and
Ashok Podar. Parekh has been accused of making brisk share purchases on
the exchange prior to March, 2001, through his associates. But he failed to
provide funds amounting to over Rs 150 crores for the same, leading to a
huge payment crisis that had affected share prices across the country.
Following the default, the exchange officials had to use the settlement
guarantee fund (SGF) to the tune of over Rs 50 crores to announce pay-out
and since then the exchange has been fighting for survival. Parekh had
earlier admitted before the joint parliamentary committee investigating the
March 2001 stock scam that he had paid Rs 3,191 crores to Kolkata-based
stock brokers towards purchase of shares, payment of margins etc. He
acknowledged that he had availed of the faulty margin system in the
exchange. The committee had urged criminal action against Parekh. The

Securities and Exchange Board of India had found out that most of the trades
done by Parekh were aimed at rigging stock prices in close nexus with
company promoters.

Who is Ketan Parekh

Ketan Parekh is a former stockbroker based in Mumbai who was convicted in
2008 for being involved in engineering the technology stocks scam in Indias
stock market in 1999-2001. A chartered accountant by training, Parekh
comes from a family of brokers and is currently serving a period of
disqualification from trading in the Indian bourses till 2017.Ketan Parekh has
been accorded with sobriquets such as the Pentafour Bull and the One Man
Army by the countrys national business newspapers, while the market
simply refers to him as KP or associates him with his firm NH Securities.
Parekh is known to have no reluctance in meeting the press. He is also
known to have razor-sharp forecasts on market developments.
What distinguishes Ketan Parekh from the 'Big Bull' late Harshad
Mehta
The two have been compared by people to have operated their scams using
similar means and that their backgrounds were similar as well. But the
differences are very conspicuous
At the outset, Mehta came from a lower middle-class and modest
background, while KPs family has been engaged as stockbrokers for a
significant time. He is also related to many prominent brokers. Secondly,

when Mehta was operating, the market was still a closed one and was just
beginning to liberalize. It was revealed later that Mehta operated using the
money of other people as his last recourse. Further, Mehta is known to have
resorted to aggressive publicity campaigns whereas KP operates almost
clandestinely. The latter has also been successful at creating stories and
selling them aggressively to institutional investors