ketan parekh accounts

8/3/2019 Ketan Parekh Accounts

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PRESENTED BY,

NIKHIL THAKUR 50

VIDHI PAHADE 51

BINILA BABU 22POOJA NAGAR 25

SAMEER SHIRKE 44

SANJAY JAIN 40

FINANCIAL ACCOUNTING

KETAN PAREKH SCAM



Who is Ketan Parekh ?



y CA by profession.

y Learned Stock market with a finance firm ± Money care

y Inherited ownership of NH Securities.

y Also known as ³Bombay Bull´ and ³Pentafour Bull´.



y Used online trading to achieve his goals.

y Started manipulation with buying penny stocks.

y Build a network of companies for stock market operation.



Commencement «

Aftek Infosys --- Increasing stocks from Rs 40 levels to

Rs 2400 levels.

Pentafour --- Loss in stock due to bad publicity,

Parekh entered and pulled it up.

R anbaxy --- Initiall y stock raised from Rs 500 to Rs

750 and declined to 550.



Cont«..

R anbaxy --- A fter KP entered ,stock raised to Rs

1,264.

Visual soft --- raised from Rs. 625 to Rs. 8448.

Sonata soft --- raised from Rs. 90 to Rs. 2150.



The K-10 Stocks

y Stocks in which Ketan Parekh Played.

y Mostl y media stocks with low liquidity.

y Ketan Parekh traded in these stocks with fictitious names.

y He operated through small stock exchanges like KSE.



Satyam Computers.

Himachal Futuristic .

SSI Ltd.

HFCL.

Global Tele systems (Global).

Zee Tele films.

Ranbaxy.

Penta Media Graphics.

Visual soft.

DSQ Software.



Stock movement of some K -10 Companies

0

1000

2000

3000

4000

50006000

7000

8000

9000

A ftek Infosys Ranbaxy Visual soft Sonata soft

Before

A fter



The Scams«..

y Loans were taken from banks to start the scam.

y

The banks included ±

GLOB A L TR UST B A NK.

B A NK OF INDI A .

UNIT TR UST OF INDI A (UTI).

M A DH A VPUR A MER CA NTILE COPER A TIVE B A NK.

ST A TE B A NK OF INDI A .



Ketan issued cheques drawn on Bank of India to MMCB.

MMCB issued pay orders against those cheques.

These pay orders were discounted at Bank of India around 2400

crores.

MMCB issued funds to Ketan Without proper securities.



Creation of fake companies.

Borrowed from MMCB branch at Mumbai.

Rs 120 crore securities scam at the Calcutta Stock

Exchange



How Ketan ran out of Luck ???

y A team of traders insisted to sell all K -10 stocks.

y This leads to fall of prices of K -10 stocks.

y In order to save K -10 stock prices ketan invested all illegal money.

y Still selling trend continues and ketan lost all the money.



How Ketan got Exposed ???

y Sucheta Dalal, was the first to expose his scams through hernews columns.

y A fter defaults of pay orders BOI launched complain againstKetan.

y Ketan got arrested by CBI.



A ftermath

y BSE index crashed by around 1ooo points within a week.

y MMCB got bankrupted.

y Total loss in banking sector = Rs. 1200 crores.

y Ketan Parekh still owes Rs. 13o crores to Bank of India.

y Ketan Parekh released on bail.



y he has been debarred from trading in the Indian stock exchanges till 2017.

y Parekh's sole conviction, which carried a one year sentence,came as a result of a transaction he conducted invol ving aunit of Canara bank.

y Ketan Parekh is rumored to be still trading under differentcompanies.



Damage Control By SEBI

y All the broker directors of Bombay and Kolkata stock exchange were fired. All brokers acting as directorsand other office bearers of the Bombay Stock Exchangehave been suspended for alleged insider trading. Inorder to prevent misuse of sensitiveinformation by broker-directors, stock markets will be corporatized soon

y Placed enquiry on team of competitor traders for their short se lling.( On March 8, 2001, the SEBI bannednaked short sales. In simple words, it means that all

short sales have to be covered by an equal amount of long purchases)

y all the trading details now has to be submitted dail y.

y In order to increase liquidity, SEBI has allowed banks to offer collateralized lending onl y through BSE andNSE.

y Please deal onl y with and through SEBI registered members of the Stock Exchange and are

enabled to trade on the Exchange. All SEBI registered members are given a registration No., which may be verified from SEBI. The details of all members of NSE/BSE and whether they areenabled to trade may be verified from NSE/BSE website .

y INVESTIG A TE UNUSU A L PRICE MOVEMENT OF SH A RES



What should be done to avoid scams???

y Regular inspection from RBI.(RBI was inspecting the account once in two years, which created ample scope for violation of ruler)

y Strengthening norms and regulations.(Lack of implication of rules andregulation. Rolling settlements (which ensures that the settlement takesplace two days after trading) will now be compulsory )

Coordination of RBI and SEBI. ( A SEBI-RBI constituted committee wouldmeet periodicall y to sort out issues, if any, arising out of overlapping

jurisdiction of the currency futures market. )

Empowering SEBI and investing



Regular inspection from RBI.To provide license to dealers and brokers. It can ban on the trading of those brokers who

are involved in fraudulent and unfair trade practices relating to stock market.It can impose the penalties on capital market intermediaries if they involve in insider trading.

SEBI uses his powers to audit the performance of different Indian stock exchange for bringing transparency in the

working of stock exchanges.

Time to time, SEBI arranges scheduled workshops to educate the investors. On 22 may 2010 SEBI imposed workshop. If

you are investor, you can get education through SEBI leaders by getting update information on this page

Strengthening norms and regulations.

Coordination of RBI and SEBI.(to maintain the flow of economy by rbi and sebi to maintain transperancy in trading.)

Empowering SEBI.

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