The investigations by the Securities and Exchange
Board of India (Sebi) into 23 entities associated or controlled
by Big Bull-II Ketan Parekh have pegged the total default
by them to various sectors at Rs 3,078 crore. The Sebi
probe has also revealed that large funds, given to a clutch
of Parekh outfits, appeared to have gone into stock
its interim report submitted to the joint parliamentary
committee (JPC) in December 2001, Sebi said: "...large
funds were given to these entities of Ketan Parekh and
associates with a view to hide the nexus between the source
of fund flow, [that is] by corporates/companies and
[the] ultimate user of these firms in the stock markets.
It was observed that funds were received by certain entities
from banks as loans, overdrafts which were diverted to
other entities for acquiring shares [and] meeting other
default by Parekh to various entities:
Rs 1,428 crore
Rs 450 crore
Rs 3,078 crore
transferred to Calcutta brokers:
Rs 2,800 crore
the nature of funds flow, the capital market watchdog pegged the
default to the corporate sector to the tune of Rs 1,200 crore,
while the default to the banking sector was pegged at Rs 1,425
crore and overseas corporate bodies (OCBs) Rs 450 crore. Senior
Sebi officials say around Rs 1,200 crore was received by various
Parekh entities from four corporate houses Zee Telefilms,
Himachal Futuristic Communication, the Adani group and the DSQ
On the funds flow of the banking sector to Parekh entities and
associates, Sebi has said the outstanding amount to Madhavpura
Mercentile Corporate Bank from the Parekh group is Rs 888.25 crore.
Besides, the amount outstanding to Mukesh Babu, a sub-broker
with Ketan entities, is Rs 225.63 crore.
The funds received by the Parekh group from ICICI Bank, Centurion
Bank and Bank of Punjab as on 31 March 2001 was Rs 65.47 crore.
Besides, the amount outstanding to Global Trust Bank was around Rs
250 crore. Finally, the Sebi probe pointed out that the Triumph
group did not provide for the non-payment of sales proceeds of
around Rs 450 crore to a set of OCBs.
Sebi has also found a nexus between Parekh and three Kolkata-based
broking entities the AK Poddar group, DK Singhania and Company
and Sanjay Khemani. Sebis detailed investigations into two of
the Parekh groups associate companies Panther Fincap
Management and Services, and Classic Credit have revealed that
from January 2000 to March 2001 these firms have transferred about
Rs 1,480 crore and Rs 1,330 crore respectively to the Kolkata
The probe also says the final picture will only emerge after all
bank accounts are analysed an exercise that will take time.
During its course of investigations, Sebi also looked into the
books of the three Kolkata-based
groups. These brokers had excessive purchase positions marked for
delivery. And on account of their failure to meet the pay-in
obligation, the settlement process was disturbed.
The probe also indicated that Singhania had received around Rs 828
crore from Parekh and his associate entities. The Khemani group
received around Rs 1.248 crore and the Podar group around Rs 887