Notably, Ketan Parekh was the person behind the 2001 stock market scam. Moreover, he is a Chartered Accountant and he started his professional career by handing over his family brokerage firm named NH Securities. Later, he followed his mentor Harshad Mehta and joined him. Moreover, you might want to know more about this personality in depth. Right? Well, in this blog, you will be provided with all the relevant and sufficient information about this topic. You just need to stick around with this blog till the end of the discussion. This blog is all about Ketan Parekh.
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About Ketan Parekh
Evidently, Ketan Parekh is a well-known chartered accountant. Moreover, he is mainly known because of the 2001 stock market scam. However, before the scam, he was known as One Man Army or Pentafour Bill of the Indian Stock Market. He used to guide people on making investments in stocks. People used to call him and follow his guidance blindly. In addition to this, during the scam, he generated 100% and will return on some of the stocks manipulated by him. Notably, he learned the tips and tricks of the stock market from his mentor Harshad Mehta and was also a promoter in a company of Harshad Mehta and Ashwin Mehta.
Ketan Parekh Scam
Notably, the records of SFIO or Serious Fraud Investigation Officer claims that the scam amount was worth around ₹40 crores. Moreover, Ketan was friends and business partner with famous personality Mogul Kerry Packer to start a venture capital firm.
Early life and family
Notably, Ketan’s age is 60 years. He was born in 1963 in an upper middle-class family which consisted of Chartered Accountants and stockbrokers. Moreover, he observed his father dealing in the stock market and he was charmed by the world of stock market. Notably, after completing CA, he joined his family business of stock brokerage, and joined Harshad Mehta’s company GrowMore. In addition, Ketan’s wife is Mamta Parekh Mohan and they have two daughters.
Role of Ketan in Scam 1992
Ketan was also involved in a scam in 1992. However, his role was not mentioned in the web series. In addition to this, Ketan was influenced by the rise of Harshad and he joined his company GrowMore in early 90s. Moreover, when the 1992 scam was uncovered, Ketan managed to escape, but his role in the scam came to the forefront in 2001 when his own scam was uncovered. Notably, he was convicted in 2008. In addition, he was sentenced to a year of imprisonment for his role in the 1992 scam. Ketan was found guilty of phoning public funds worth ₹48 crore from a branch of Canara Bank during the scam.
How does he pump and dump K-10 stocks?
Evidently, Ketan not only used the same pump and dumb scheme to earn huge profit, but he also altered the strategy to suit his method. Notably, he decided to target institutional investors who invest heavily in stock markets and are easier to control in comparison to retail investors. In addition, he was bullish on the Information, Communication and Entertainment sector, particularly during the Dot-Com boom. Moreover, he invested in the stocks of this sector and his major predictions were correct because the prices of these stocks skyrocketed. Notably, he was able to convince the institutional investors with accurate predictions. He manipulated some of the stocks and even generated 200% annual returns. Such stocks were commonly known as K-10 stocks. These include HFCL, GTL, Pentamedia Graphics, Silverline technologies, Ranbaxy, Zee telefilms, Aftek Infosys and more.
Ketan Parekh: How did he execute the scam?
Notably, he raised the funds to pump up the stocks. Ketan was on the board of Global Trust Bank and MMCB. Moreover, he used to clot in the banks to receive huge loans against his shares. During those days, according to the RBI, banks could give only up to ₹15 crores as loans to a stock broker. However, Ketan bribed officials of their bank to receive loans of around ₹800 crores from MMCB and ₹100 crores from GTB. In addition to this, Ketan also defrauded MMCB and issued a payment of worth ₹137 crore to an office company. Not only this, he also took massive amounts of money from promoters house companies to shoot up prices of the stock.
Notably, it would help increase the net worth of traders, whose money was invested in the company. Not only this, it will also help Ketan to book profits after squaring his position.
Ketan Parekh: How was the scam exposed?
Notably, after the budget of 2001, the Sensex crashed by 176 points. This propelled the NDA government to conduct an investigation into the market crash. Moreover, Ketan was the prominent name in the stock market and transactions came under scrutiny. After investigation, the RBI found Ketan’s orders to be suspicious. In addition, during that time, a payment crisis occurred in the Calcutta Stock exchange when the beer started dumping K -10 stocks. Moreover, all of this result resulted in Sensex tumbling 146 points.
Trivia
- BIO: Ketan was the main plotter of the 2001 scam.
- In addition to this, he got influenced from his father and stepped into the world of stock market.
- BIOEvidently, he was also involved in the 1992 scam with Harshad Mehta.
- Notably, he manipulated some of the stocks and generated 200% out of them.
- In addition to this, he was arrested on 31st of March, 2001 for defrauding the Bank of India for Rs.137 crores.