Ketan Parekh – Biography of the man behind the Ketan Parekh scam – WikiBio
Ketan Parekh (KP) is a former Mumbai stockbroker who is notorious for masterminding the Indian stock market manipulation scam that took place between 1998 and 2001; it was later known as the Ketan Parekh scam. He was a protégé of Harshad Mehta, who ran the securities scam in 1992. Ketan is widely known as the “five bulls” of the Indian stock market.
family and first years
Ketan Parekh was born in 1963 (Age 59; as of 2021) into a wealthy upper middle class CA and stockbroker family. His father Vinaychandra N Parekh introduced him to the changing world of the stock market. After becoming a Chartered Accountant, KP started his career with a well-known prime brokerage firm called Narbheram Harakchand Securities (NH Securities). His wife is Mamta Parekh and the couple have two daughters. His family (wife and two daughters) are rumoured to have moved to London to treat his daughter, who has suffered from post-viral encephalitis since she was one and a half months old.
Participate in the Harshad Mehta scam
In the early 1990s, Ketan got in touch with Harshad Mehta and joined Harshad’s agency, GrowMore. Under his tutelage, KP learned the modus operandi of the Mehta Brothers (Harshad and Ashwin). Although Ketan slipped through the cracks after the Harshad Mehta scam, his role in the 1992 scam came under scrutiny when his own was exposed in 2001. He was then convicted in 2008 of embezzling Rs 480 crore from a division of Canara Bank and jailed for a year in a 1992 fraud case. Ketan Parekh said in an interview with NDTV,
All we do is a deal. We have received money from the mutual fund, we have delivered the shares on time, and the shares have been registered on time. Other than that, our role has no role in this transaction.”
Pied Piper of Dalal Street was known for his Midas style in the late ’90s. His business practices were as unconventional as his mentor’s, but unlike Mr. Mehta, he did not use public funds to manipulate stock prices. The promoters of various companies provided Ketan with the funds to manipulate the stock price. He also reportedly used his connections at Global Trust Bank and Madhavpura Commercial Cooperative Bank to obtain funds and illegally inflate the prices of various stocks. He used to accumulate huge volumes by trading online and then manipulate prices without anyone noticing. Ketan used to manipulate shares of Visualsoft, which soared from Rs 625 per share to Rs 8,448. He did the same with Zee TV Movies and the share price rose from Rs 30 to Rs 720 per share.
To cover profits, Mr. Parekh used financial institutions such as UTI to sell bloated stocks. In return, Ketan is rumored to receive huge rebates in the form of equity from these companies. He has been dubbed “Five Bulls” and “One Man Army” for his aggressive investing style. In a media interaction with India Today, an anonymous stockbroker said,
He may be down to earth, but he’s very smart and shrewd. He is very aggressive and known for his quick moves. Used KP stock rose like a rocket – no gradual increase. If he decides to let a stock fall, he will act immediately. “
At the height of his stock market domination, Ketan picked 10 of his favorite stocks, including Zee Telefilms, HFCL, Silverline, Satyam Computers, Aftek Infosys, DSQ Software, Ranbaxy, Pentamedia Graphics, Sonata Software, and Visual Soft. These 10 The stocks are euphemistically called “K-10” stocks by other brokerages. A savvy investor, Ketan is well aware of the IT boom of the late ’90s, so he invested heavily in software and other technology-related companies.
His Millennium Carnival
Although Ketan’s image became flamboyant after a huge party called Millenium Bash in 2000, he was a shy, soft-spoken stockbroker who kept a low profile, lived a simple life, and Keep your distance from the media. before this happens. This makes it hard to believe that he was involved in the scam. Even Sucheta Dalal (the reporter who exposed the Harshad Mehta hoax), quoted in her 2003 Rediff article,
When I met him sometime in July 2000, I also felt that his feet were too far on the ground to follow the path of Hassad.In fact, until August 25 most newspapers don’t even have a picture of the broker at the first signs of trouble in the market.
However, things changed after his famous Millennium Carnival (New Year 2000), which he held at his lavish waterfront bungalow in Mandeva, off the coast of Mumbai. The party was packed with senior businessmen, fund managers and Bollywood celebrities. Guests first gathered for a champagne reception at the Taj Mahal Hotel’s Sea Lounge restaurant, before being escorted to his bungalow on a high-security ferry. The party was covered on the front pages of many tabloids. Ketan has since gone on to buy a range of luxury cars including Cadillacs and Lexus (just like Harshad owns). He is admired by a long list of celebrities, from Bollywood superstar Amitabh Bachchan to global tycoons such as Kerry Parker. KP reportedly became good friends with Mr Bachchan after turning Amitabh Bachchan Corporation Ltd, a defunct company, into a profitable company. Later, Mr. Parekh began appearing on the front pages of business newspapers, giving his views on union budgets and other finance-related topics. The newspaper also reported that Ketan was forming a joint venture with Indian businessman Vinay Maru and Australian tycoon Kerry Parker.
His scam exposed
In the late 1990s, the world economy was going through a difficult period. Excessive speculation by internet trading companies led to the massive market crash of 2001, commonly referred to as the dot-com bubble. KP is also caught in a tech bubble like the rest of the world. On March 1, 2001, two days after the federal budget was passed, the BSE Sensex plunged 176 points, prompting the then NDA government to investigate the market crash. As a major player in the stock market, KP’s trading is under scrutiny. The Reserve Bank of India found suspicious of his payslip, which he used as collateral for a bank loan; opened an investigation into Mr. Parekh. Meanwhile, a Kolkata-based beer cartel sparked a payments crisis that dumped K-10 shares. KP and other brokers holding shares in his name sold off most of his K-10 shares after regular trading hours on the Kolkata Stock Exchange. This caused the Sensex to drop another 149 points.
as a result of
The scam resulted in a massive drain of wealth, causing Ketan and his followers to go bankrupt. According to a report by SFIO (Serious Fraud Investigation Office), the scam is estimated to be between Rs 30,000-40,000 crore. The CBI arrested Ketan on March 30, 2001, charged him with defrauding Indian banks of Rs 1.37 billion and held him for 53 days. The scam led SEBI to fix the vulnerability in the system. The one-week trading cycle is shortened to one day. Carriers are banned from trading. Brokers’ control over various stock exchanges was weakened.
Trial and Sentencing
A joint parliamentary committee (30 members) was formed to investigate Ketan Parekh’s role in the 2001 financial scam. The Commission found Mr. Parekh guilty of circular trading. Another report from the Intelligence Service suggested that KP was involved in manipulating the share prices of companies such as Dewan Housing Finance, Goenka Diamond, Orchid Chemical, IVRCL, GMR Infra, Pantaloon Retail, TBZ IPO, KS Oils and others. Ketan was subsequently banned from trading stocks for illegally manipulating the stock market until 2017. Ketan was sentenced to two years in prison by the CBI Special Court in March 2014 for cheating, The Economic Times reported. In 2018, a fast-track court sentenced him to three years in prison for violating the SEBI Act. Later, the Bombay High Court suspended his sentence and granted him bail.
The Ketan Parekh show continues
Despite KP’s public distancing from the stock market, a SEBI report in 2009 said Ketan remained active in the stock market with the help of many stockbrokers. This resulted in SEBI banning 26 companies for violating the SEBI Act.
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