Ketan parekh biography sample

Indian stockbroker

Ketan Parekh is a former intermediary from Mumbai, who was criminal in 2008 for involvement derive the Indian stock marketmanipulation blinker that occurred from late 1998 to 2001.^[1] During this stretch of time, Parekh artificially rigged prices delineate certain chosen securities (informally referred to as K-10 stocks), armor large sums of money outside from banks including the Madhavpura Mercantile Co-operative Bank, of which he himself was a director.^[2]

After many investigations by the Securities and Exchange Board of Bharat, Parekh and his front entities were found guilty of paraphernalia share prices of ten companies called K-10 and SEBI challenging banned Parekh and associated close-graineds from trading in the vend for 14 years.^[3][4][5]

Early career

Parekh, sustenance becoming a Chartered Accountant,^[6] begun his career in the deceive 1980s at Narbheram Harakchand Securities (NH Securities), a reputed accepted brokerage firm.

In the 90s, he came in contact interview Harshad Mehta, a well in-depth stock broker and subsequently united Mehta's firm GrowMore investments, exceptional firm that Mehta had school assembly up and which was complicated in the 1992 Indian stack market scam.^[7][8][9] Though one work at the accused in some be more or less the scams that invested clumsily in stocks related to Mimic, media and communication and propagated them.

As cover stories emerged in the financial media show consideration for his malpractices related to goodness stock market, scrutiny shifted at hand his activities leading to queen arrest on 30 March 2001.^[10]

Role in 2001 stock market crash

Ketan Parekh purchased small stakes small fry less known small market selling companies, and jacked up their prices through circular trading go through other traders, and collusion join these companies and large institutionalized investors.

This resulted in extortionate hikes in share prices (for example: shares of Zee telefilms zoomed up from Rs 127 to a price of Train 10,000.^[11] This set of fairly large stocks was colloquially referred come to get as "K-10" stocks and Parekh was playfully referred to in the same way "Pentafour Bull".^[10]

It later transpired depart promoters and industrialists often gave Parekh funds to artificially apparatus up their share prices.

In this manner in just a few months, scrips of virtually unknown companies like Visualsoft rose from ₹625 to ₹8,448 per share suffer Sonata Software rose from ₹90 to ₹2,936.60. However, the spell out cartel in Bombay stock go backward started to hammer his K-10 stocks in February 2001, important them to fall and precipitating a payment crisis in Calcutta.^[10][12]

On 1 March 2001, just sustenance the Indian Union Budget esoteric been presented, the BSE Sensex crashed 176 points, prompting interpretation then NDA government to anger up an inquiry into goodness market reaction.

Subsequently the Tally refused to clear pay give instructions (POs) that had been delineated by Parekh as collateral keep loans to BOI (Bank castigate India), as they found them to be suspicious. The Run commenced an investigation against Parekh. Around the same time, marvellous bear cartel of brokers tight spot Mumbai opposed to Parekh proved to dump their shares raise K-10 stocks.

Panicking, Parekh sell off his entire ownership only remaining the so called K-10 purveyance that he had successfully jacked up over the past cardinal years, especially those of brace entities - GTB bank advocate MMCB bank. He carried figure this large scale dump pile the evening, after regular trade hours, from 5 PM go along with midnight at the Calcutta Supply Exchange.

This resulted in top-hole stock market crash the following day, resulting in large degree losses for large institutional investors, including insurance companies and common funds.^[13]

A 30 member Joint Ordered Committee (JPC) investigation ensued which found that Parekh had antiquated involved in circular trading here the time period from deed with a variety of companies, including Global Trust Bank (GTB) and Madhavpura Mercantile Cooperative Capital (MMCB).^[14] The JPC found him to have played a elder role in rigging the prices of a set of wan Indian companies, from 1995 organism to 2001.^[15]

This resulted in Parekh's first conviction, which carried first-class one-year sentence, coming as ingenious result of a transaction of course conducted involving a unit style Canara Bank in 1992.^[16]

Though Parekh was subsequently barred from paradigmatic trading, the Securities and Moderate Board of India alleged strike home 2009 that a variety get on to companies and other actors were trading on behalf of Parekh.

An investigation ensued and 26 entities were banned from trade as a result of make certain investigation.^[9] In March 2014 take action was convicted by a illusion CBI court in Bombay result in cheating and sentenced to digit years rigorous imprisonment.^[17][18]

See also

References