Calcutta, Dec. 2: Calcutta police today swooped down on India’s financial capital to snare their most high-profile quarry away from home.
Ketan Parekh, the Big Bull who ramped up stocks to dizzy heights in the glory days of early 2000 before the bottom fell out of the market a year later, was arrested by sub-inspectors Debashis Datta and Ashim Das this afternoon from his kingdom in bygone days — Dalal Street in Mumbai.
The police will move court tomorrow to obtain a ‘transit remand’ that will give them permission to bring Parekh to Calcutta.
Parekh is also at the centre of the Calcutta Stock Exchange scam last year when he and a gaggle of Lyons Range brokers yanked up DSQ Software and HFCL stocks to breath-taking levels before a massive payment crisis erupted.
Sources in Lalbazar said: “The charges being pressed against Parekh go beyond the scam in Calcutta last year, which, of course, he had masterminded.”
The Parekh-inspired rally drove the rise in the country’s technology stocks. The BSE sensex ran up 600 points between October 1999 and March 2000 to 5300. During the same period, other indices like Nasdaq posted bigger gains, which moved up from 2750 to 5050 — an advance of 2300 points.
The fall was equally rapid. A year from the middle of March 2000, prices crashed, precipitating the payment crisis in Calcutta. In a year, the sensex declined by about 28 per cent from 5100 to 3700. The sensex has continued to tumble since then. On Monday, it was quoted at 3270.36.
Calcutta police are also planning to slap charges of price rigging against Parekh. They may also book the promoters of those companies that had funded him.
“He rigged the markets in collusion with promoters of some companies, and other market participants like Stock Holding Corporation of India Ltd (SHCIL) and Credit Suisse First Boston (CSFB) — a foreign brokerage.
“The Securities and Exchange Board of India (Sebi) has indicated in its report to the joint parliamentary committee probing the scam that Parekh had received Rs 800 crore in funding from various companies between January and March 2001,” police sources said.
The most influential brokers in Calcutta were pawns in Parekh’s price-rigging game. He duped them finally, which precipitated the payment crisis on the Calcutta Stock Exchange.
His closest allies in Calcutta were Dinesh Kumar Singhania, Ashok Kumar Poddar, Harish Chandra Biyani and Sanjay Khemani. He also had contacts with a number of badla — private financing — barons in Calcutta.
Explaining the charges, sleuths said: “The management of SHCIL was hand in glove with Parekh. He abused SHCIL’s sell-and-cash scheme to rig the price of the Adani Exports stock. The promoter-managing director of DSQ Software, too, had close links with Parekh.”