13-09-2013, 03:50 PM
Who Ketan Perekh is ?
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Who is He?
Ketan Parekh is a former stock broker from Mumbai, who was convicted in 2008, for involvement in the Indian stock market manipulation scam in late 1999-2001.
Currently he has been debarred from trading in the Indian stock exchanges till 2017.
The Crash that Shook the Nation… News
The 176-point Sensex crash on March 1. The Union budget acclaimed for its growth initiatives and had prompted a 177-point increase in the Sensex. This sudden crash shock the nation & prompted SEBI to launch immediate investigations into the volatility of stock markets..
The RBI ordered some private sector banks to furnish data related to their capital market exposure.
President Anand Rathi‘s resign, following allegations that he had used some privileged information, which contributed to the crash.
By the end of March 2001, at least eight people were reported to have committed suicide and hundreds of investors were driven to the brink of bankruptcy.
The scam opened up the debate over banks funding capital market operations and lending funds against collateral security And RBI was inspecting the accounts once in 2 years, which created ample scope for violation of rules.
The first arrest in the scam was of the noted bull, Ketan Parekh (KP), on March 30, 2001, by the Central Bureau of Investigation (CBI).
Profile & Background of scam :
KP is C.A. by profession and used to manage NH Securities started by his father.
Known for maintaining a low profile, was known as the 'Bombay Bull' and had connections with movie stars, politicians and even leading international entrepreneurs like Australian media tycoon Kerry Packer. (KPV Ventures, a $250 million venture capital fund that invested mainly in new economy companies. )
And the Story begins…
Although KP was a successful broker, he did not have the money to buy large stakes. According to a report,
12 lakh shares of Global in July 1999 would have cost KP around Rs 200 million.
The stake in Infosys would have cost him Rs 50 million,
While the Zee and HFCL stakes would have cost Rs 250 million each.
KP borrowed from various companies and banks for this purpose. His financing methods were fairly simple. He bought shares when they were trading at low prices and saw the prices go up in the bull market while continuously trading. When the price was high enough, he pledged the shares with banks as collateral for funds.
Is he Still Operational...
Oh yes!
Intelligence Bureau. "They (Parekh and associates) have claimed that they possess insider information on the Government's proposal to decontrol the sale of gas. which is expected to raise profit margins of these companies by about 20 per
Though Parekh is currently barred from stock trading, in 2009, the Securities and Exchange Board of India alleged a variety of companies and other actors were trading on behalf of Parekh; 26 entities were banned from trading as a result of that investigation.