The market regulator, the Securities and Exchange Board of India (SEBI), has barred 26 entities from dealing in the capital markets for acting as conduits for Ketan Parekh.

In a press release published on its web site, Sebi said that these entities allegedly executed synchronised trade in five scrips, which includes Cals Refineries Ltd, Confidence Petroleum India Ltd, Bang Overseas Ltd, Shree Precoated Steels Ltd (SPSL, now known as Ajmera Realty & Infra India Ltd) and Temptation Foods Ltd (TFL).

''In all these trades, buy and sell order quantities and buy and sell order rates were same. The orders had perfectly matched and time difference between the placement of buy and sell orders was less than 60 seconds. In all the trades, connected clients were appearing simultaneously on both sides of the trade,'' Sebi said.

The major entities that have been barred include Maruti Securities Ltd, Kundan  Leasing and Finance Private Ltd, Chandra Financial Services Private Ltd, Jay Investrade Private Ltd, HSM  Financial Services Private Ltd, Shanti Financial Services Private Ltd, and Acme Craft Private Ltd.

Sebi has also referred the matter to the income tax department, Enforcement Directorate, and stock exchanges to take further action.

SEBI observed that at least five of the connected clients appear to be related to Shirish Maniar, who was implicated by CBI along with Ketan Parekh in the Madhavpura Mercantile Co-operative Bank case. (See: Stock brokers Ketan Parekh, Hiten Dalal, six others get one-year term for role in 1992 securities scam).

Ketan Parekh along with the companies belonging to him is already debarred by SEBI from dealing in securities market. Therefore, it appears that he has conveniently used the connected clients at will as his front entities for executing trades desired by him in the securities market'' Sebi noted.

In the above mentioned trades, these entities made a profit of Rs42.01 lakh, Rs4.72 crore, respectively on account of their dealing in the scrips of Confidence Petroleum and bang Overseas Ltd. However, they incurred huge losses of Rs3.68 crore, Rs7.64 crore and Rs4.68 crore, respectively, while dealing in the scrips of Cals Refineries, SPSL and TFL.

The regulator noted that ''Despite having made such losses, they continue to execute such uneconomic transaction indicates that they possibly had alternative pay-offs outside the securities market. In addition they would have also paid reduced income tax on account of the set off of the losses incurred in their dealing''.