INDIA BUSINESS WORLD - DECEMBER 16^th - DECEMBER 31^st - 2007

CHARGESHEET FILED AGAINST KETAN PAREKH

Almost six years after the Central Bureau of Investigation registered a case against stock broker Ketan Parekh, the investigating agency filed three chargesheets against stock broker Ketan Parekh, former top executives of Global Trust Bank and others for swindling around Rs 250 crore of public money.

Apart from Parekh, the CBI has chargesheeted directors of the companies held by the stockbroker including Darmesh Doshi, Jatin Sarvaiya, Kirtikumar Parekh, Kartik K Parekh and chairman of Singapore-based Brentfield Holdings T L Chandran under various sections of IPC and Prevention of Corruption Act. The chargesheet also names Ramesh Gelli, the former chairman and MD of Global Trust Bank, which has merged with the Oriental Bank of Commerce, and GTB executive director Sridhar Subasiri.

The CBI alleged that during 1999 to 2000 Gelli and Subasiri in a criminal conspiracy with Parekh and the others, indiscriminately sanctioned temporary overdrafts of up to Rs 250 crores to Ketan Parekh entities (KP entities) without an application, collateral securities or checking the genuineness of the ``pay-in''requirements. This money, the CBI chargesheet said, was used to manipulate the share prices and stock market by Ketan Parekh.

The CBI chargesheet further alleged that through circular trading and synchronised cross deals, Ketan Parekh repeatedly booked losses for his companies which were passed on to the GTB and the gains were passed onto Overseas Corporate Bodies controlled by Parekh. In this manner the funds were siphoned off to Mauritius.

The CBI also filed a chargesheet for the violation of Reserve Bank of India's "Group Exposure norm", under which no individual or a company is given more than 50 per cent of bank's capital for overdraft facility. But to circumvent the guidelines on group exposure norms, the GTB sanctioned funds to the associate companies of Ketan Parekh from where the funds were diverted into the account of the KP entities, the CBI alleged. The CBI said that the money that was released to these companies was later found to have been routed into the account of Parekh.

Another chargesheet related to allege bungling in issuance of Preferential Shares by GTB to meet the Capital Adequacy Norms to generate additional capital. According to the chargesheet, the Preferential Shares floated by GTB were purchased by Parekh and his associates with the bank's overdraft funds.