Parekh: Troubled times

Mumbai, April 1: Bombay High Court today sentenced stock broker Ketan Parekh to one-year rigorous imprisonment in a case that dates back to the Harshad Mehta scam of 1992.

Another stock broker Hiten Dalal and five others were also given the same punishment, while two other accused were sentenced to six months’ imprisonment in the 1992 Canfina case.

All of them are out on bail, and Justice V.M. Kanade of the special court (for trial of offences relating to transactions in the securities act) extended their bail till July 31, to enable them to file appeals in the Supreme Court.

Parekh’s name surfaced for the first time through the scam, in which the accused had entered into a criminal conspiracy to “siphon off Rs 47 crore”.

“Had he been convicted and jailed earlier, he would not have committed other offences,” Justice Kanade said, alluding to Parekh's involvement in the stock market scam of 2000.

The modus operandi of the Canfina scam was as follows: huge amount of money was transferred from Bangalore-based Canbank Financial Services (Canfina), a subsidiary of Canara Bank, to Mumbai-based Canbank Mutual Fund (another subsidiary of Canara Bank) between October 1991 and January 1992.

This was purportedly to purchase government securities for Canfina, but in reality the money was transferred to the accounts of Parekh, Dalal and the other three stock brokers, namely S. K. Jhaveri, Pallav Seth and Navinchandra Parekh, who is Ketan's uncle.

The brokers used the money — to the tune of Rs 47.7 crore — to invest in stock markets. At the end of the financial year, the money was returned to Canfina.

The court, on March 13, convicted the five brokers along with Canfina’s former assistant vice-presidents Sainath Mohan, M. K. Ashok Kumar and former general manager of Canbank Mutual B.R. Acharya for criminal conspiracy, misappropriation of funds and cheating.