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PRESENTATION ON KETAN

PAREKH

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MR.SCAMSTER

Who is Ketan Parekh?

Ketan Parekh- Bombay Bull was a known broker of Indian

stoc

k exch

ange.. C.A. by profession

He is from a well to do share-brokerage based family

He was involved in the shares scamof the year 2000/01.

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How Did It Start

Over the years, Ketan built a network ofcompanies mainly

concentrated in Mumbai

He borrowed funds from various companies and banks for thispurpose by offering shares as collateral security

Ketan selected companies for investment withhelp fromhis

research team, whichlisted high growth companies with a smallcapital base

The shares were held through KPs company, Triumph

international

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K- 10 COMPANIES

Amitabh Bachchan Corporation Limited (ABCL)

Mukta Arts

Tips

Pritish NandyCommunications

HFCL

Global Telesystems (Global)

Zee telefilms

Crest Communications

Penta Media Graphics

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How He Funded His Scams

KP issued cheques drawn on BOI toMMCB(Madhavpur

Mercantile Cooperative Bank)

Against this MMCB issued pay orders

The pay orders were discounted at BOI

It was alleged that MMCB issued funds to KP without proper

collateral security.

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KP reportedly used his BOI accounts to discount pay orders

worthRs. 24 billion

BOIs losses eventually amounted to well above Rs. 1.2 billion

Borrowing from MMCB- opened 16 accounts at Mandvi

branch(Mumbai) either directly or throughother broker firms

Borrowed Rs. 250 crores form Global Trust Bank.

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How The ScamBroke Out

The prices of the shares started falling in March 2000

The crash was a result offall at NASDAQ that saw fall in K-10

stock as well

In the next twomonths, sensex declined by 23% and the K-10

stocks declined by 67%

.But what next ???

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In May 2000, the prices picked up back and the prices of K-

10 rise again

The prices of stock doubled like HFCL doubled from Rs. 790 toRs. 1353(June 2000)

By December 2000, NASDAQ fell again and KP stocks went

down

KP faced liquidity problems

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By Feb 2001 Stocks held by KP and his broker were reducedto 6-7 billion from 12 billion

Situ

atio

n wo

rsened wh

en KPsB

adl

a Paym

ent(5 to

6b

ill

io

n)was not honored for settlement and 70 CSE brokers along

with top 3 brokers made default

By mid March 2001 the value of shares went to 2.5- 3 billion

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The End.

KPs brokers started pressurizing himfor payments

SEBI tricked the regulatory norms

Finally KP was arrested(March 30, 2001)

Bu

t is th

is th

e end?

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Currently he has been debarred from trading in the Indian stock

exchanges till 2017

His associates are acquiring very large positions in petroleumcompanies ONGC and HPCL

(Parekh and associates) possess insider information

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Comparison of HM & KP

But the only thing common is

HM KP

1. Poor man's son Family has been into stock broking for

some time.

2. Operated in a closed-but-

liberalising market.

Parekh works in a more mature market

with electronic trading.

3. Publicised campaigns. Parekh is silent.

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THANK YOU

PRESENTED BY GROUP 5:

DEEPIKA KUMARI

PRERNA SINGHMADHULIKA

NEHA KUMARI