| The long arm of law: Ketan Parekh (right) being whisked out of Bankshall Court by the police on Monday. Picture by Kishor Roy Chowdhury.
Calcutta, Jan. 20: At long last Big Bull Ketan Parekh turned himself over to Calcutta Police. He appeared before the chief metropolitan magistrate of Calcutta today seeking bail, but was remanded in the custody of Calcutta Police till January 28.
Parekh was arrested in Mumbai on December 2 by two detectives of the city police — Debashis Dutta and Ashim Das — but they could not bring him to Calcutta. Parekh obtained bail from the additional chief metropolitan magistrate of Mumbai on December 3, which was subsequently extended a couple of times by Mumbai High Court.
The police said Parekh had rigged stock prices in collusion with brokers in Calcutta. He was also responsible — albeit indirectly — for the Rs 120-crore payment crisis at the Calcutta Stock Exchange.
“The main charge against him is of manipulating stock prices with the criminal intent of cheating investors. A number of stockbrokers in Calcutta were pawns in his game. Some of them defaulted to the stock exchange as he did not fulfil his payment obligations to them,” the police said.
Denying the charges, Parekh’s lawyers said today he had been trading on the Calcutta Stock Exchange through various brokers in the city over a very long time, but without any intention to rig shares prices or cheat the public.
“Parekh had paid Rs 3,197 crore to various brokers in Calcutta over one-and-a-half-years for transactions in shares, but nothing ever went wrong. All these transactions were well documented,” his lawyers said.
This is the first time Parekh has been detained by an investigating agency for offences relating to the stock market. The Central Bureau of Investigation (CBI) had arrested him in August 2001 for alleged defalcation of funds from Bank of India and Madhavpura Mercantile Bank. He was later released on bail on health grounds.
In an extended courtroom battle today, Parekh’s lawyers said he had repeatedly offered to help the police with their investigation over the last one-and-half months, but no effort was made to interrogate him. “Above all, the charges against him are not tenable. He is on a strong wicket,” Parekh’s lawyers said later.
At the end of an hour-long argument, Parekh was lodged in the court lock-up while his wife left in tears. Parekh, who came to the court at around 2 pm, had to wait for 90 long minutes for the gavel to fall. Sources say the police have already started interrogating him.
For the detective department of the city police, Parekh is one of the most significant catches ever. Swapan Dasgupta, officer in-charge of the cell investigating the payment crisis, said, “Our investigation could not have progressed without Ketan. We hope to tie up the loose ends in this case now.”
The Joint Parliamentary Committee (JPC) that probed stock market irregularities had held Parekh responsible for the upheaval. The panel recommended further investigation by the capital market regulator and criminal proceedings against Parekh.
The city police have so far arrested all the three defaulters — Dinesh Kumar Singhania, Harish Chandra Biyani and Ashok Kumar Poddar — besides some of their associates. They are now on the trail of Dinesh Dalmia, the promoter-managing director of DSQ Software Ltd, who lives in Chennai.
Dalmia recently made an attempt to leave India, but was thwarted by the police in Delhi airport. He, however, denies charges that he had anything to do with brokers in Calcutta, particularly Harish Chandra Biyani, who he tried to bail out after he failed to fulfil his payment obligations to the bourse.
With the detention of Parekh, the Calcutta Stock Exchange authorities are now hopeful of recovering some of its dues. The three defaulters owe around Rs 90 crore to the exchange, much of which, they say, is due to Parekh not fulfilling his commitments to them. The defaulters, after being arrested, had offered to buy peace, but failed to impress the exchange authorities.