If the price falls, he buys the shares at the lower rate, and makes a profit on the difference. Analysts pointed out that RBI was inspecting the accounts once in two years, which created ample scope for violation of rules.
Between andas the technology bubble was engulfing the rest of the world, the stock market in India sprang to life too. However, with improvements in the global technology stock markets, the K stocks began picking up again in May And to his credit, Parekh forced lethargic policy-makers to institute reforms in the financial system.
As cover stories emerged in the financial media of his malpractices related to the stock market, scrutiny shifted to his activities leading to his The ketan parekh scam the crash on 30 March Broker control over stock exchanges was demolished.
These companies have the best fundamentals and growth prospects. KP reportedly used his BoI accounts to discount pay orders worth about Rs 24 billion between January and March The scam opened up the debate over banks funding capital market operations and lending funds against collateral security.
Punjab National Bank took over the bank that was up for sale after RBI initiated the move to weed out the broker promoter Rajendra Bhantia from the bank. In the aftermath of the scam, many gaping loopholes in the market were plugged.
Contrary to democratic ideals, the Houses of Parliament did not symbolise the aspirations of the masses but the clout of a chosen few. Parekh was arrested in March that year and was in custody for 53 days. Sebi says that Rs 27 billion was sent by Ketan to Calcutta brokers; Rs 29 billion vanished overseas, Rs 3.
Analysts claimed that KP borrowed from various companies and banks for this purpose. The media covered every incident in his life including that of him forming KVP Ventures a collaboration with Vinay Maloo and the Australian magnate Kerry Packerforming an investment bank Triumph international and turning the loss making ABCL into a profitable firm.
When a shaky calm returned to Parliament so did the realisation that the country had been lucky. Around the same time, a bear cartel of brokers in Mumbai opposed to Parekh tried to dump their shares of K stocks.
At one stage, the terrorists were less than a metre away from the three steps that lead into the office of the Rajya Sabha chairman, Vice-President Krishan Kant.
In the past, CBI announcements were usually followed up with a quick arrest, this time it has gone silent. By the end of Marchat least eight people were reported to have committed suicide and hundreds of investors were driven to the brink of bankruptcy.
Bank of India Of the five banks hit by pay order defaults, Bank of India has unfortunately been the worst hit. This led to the exit of Ramesh Gelli in Yet, unlike the previous scam, this one is absurdly simple and brazen in its execution.
However, the bear cartel in Bombay stock exchange started to hammer his K stocks in Februaryleading them to fall and precipitating a payment crisis in Kolkata. Forward trading was formally introduced in the form of exchange-traded derivatives to ensure a well-regulated futures market.
If prices rise, he buys the shares at the higher price, and sustains a loss. It cashed Rs crore fictitious pay orders issued by the Ahmedabad based Madhavpura Bank to arrested broker Ketan Parekh. At last investigations by the Central Bureau of Investigation and the Securities and Exchange Board of India reveal that the sheer magnitude of money moved around by Parekh or available to him for his market manipulation was a staggering Rs 64 billion.
The daily closing figure of this index broadly reflects the performance of the capital markets. Co-operative banks It is now estimated that exposure to co-operative banks is going to cost the banking sector above Rs 1, crore.
This suggests that as soon as the infotech, communication and entertainment stock-led boom began to lose momentum, Parekh shrewdly began to move his speculative activities to the unofficial market in Calcutta in order to avoid detection.
The collapse of Madhavpura Mercantile Co-operative Bank after Ketan Parekh used the bank to fund his stock market rigging was the high point. All it has done is to request the Mauritius Offshore Business Activities Authority to give details in respect of actual beneficiaries, source and utilisation of funds of OCBs and sub-accounts mentioned in its preliminary report.
He is, however, now suspected to be operating in the markets through conduits. SEBI also banned trading by all stock exchange presidents, vice-presidents and treasurers.
For two years, marketmen followed his every action because all he touched turned to gold. In its preliminary investigation report, SEBI unearthed a transfer of nearly Rs 11 billion to Calcutta brokers, most of whom have had their businesses suspended because of payment defaults.
KP used around 16 such accounts, either directly or through other broker firms, to obtain funds. He carried out this large scale dump in the evening, after regular trading hours, from 5 pm to midnight at the Calcutta Stock Exchange.The Ketan Parekh Scam The Crash that Shook the Nation The point Sensex crash on March 1, came as a major shock for the Government of India, the stock markets and the investors alike.5/5(1).
The Ketan Parekh Scam "All my lifetime's savings are gone. I don't know how to feed my family." - A small investor hit by the Ketan Parekh scam, in April The Crash that Shook the Nation The point1 Sensex2 crash on March 1, came as a major shock for the Government of India, the stock markets and the investors alike.
The Ketan Parekh Scam The Crash that Shook the Nation The point1 Sensex2 crash on March 1, came as a major shock for the Government of India, the stock markets and the investors alike.
Ketan Parekh can best be described as the Pied Piper of Dalal Street. For two years, marketmen followed his every action because all he touched turned to gold. Better known as the Pentafour Bull, he kept a low profile, except when he threw a millennium bash that was.
According to market sources, though Ketan Parekh [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 would have cost KP around Rs million. The stake in Aftek Infosys would have cost him Rs 50 million, while the Zee and HFCL stakes would have cost Rs million each.
The Ketan Parekh Scam The Crash that Shook the Nation The point Sensex crash on March 1, came as a major shock for the Government of India, the stock markets and the investors alike.
More so, as the Union budget tabled a day earlier had been acclaimed for its growth initiatives and had prompted a point increase in the Sensex.Download