ketan parekh scam ppt 2link
TRANSCRIPT
Presented By :Shilpi Agarwal
Introduction on Corporate Frauds OR White Collar Crimes
White Collar Frauds refers to financially motivated non-violent crime committed by business and government professionals.
Fraud is a worldwide phenomenon that affects all contiments and all sectors of the economy.
According to ACFE, Fraud is “A deception or misrepresentation that an individual or entity makes knowing that misrepresentation could result in some unauthorised benefit to the individual or to the entity or some other party.”
There are many types of Frauds, including the following common frauds:
Theft of cash Misuse of acconts Bribery and corruption Financial accounting mis-statements.
Objectives of the Study
National – International Comparison
On the basis of types of Frauds held in Indian & Global Companies
On the basis of Frauds committed by internal & external factors of Companies
THE KETAN PAREKH SCAM A Mumbai based stock broker
chartered accountant by profession
KP took advantage of low liquidity in certain stocks which later came to be known as ‘K-10’ Stocks
Held significant stakes in the K-10 companies
The buoyant stock markets from January to July 1999 helped the K-10 stocks increase in value substantially
As a result other brokers and fund mangers started investing heavily in these stocks
THE K-10 STOCKS
Aftek InfosysDSQ softwareGlobal telesystemsHimachal Futuristic CommunicationsPentamedia GraphicsSatyam computersSSIZee TelefilmsPritish Nandy Communications
All my lifetime's savings are gone. I don't know how to feed my family."
- A small investor hit by the Ketan Parekh scam, in April 2001.
Impact on Stock Market
2001: The Market fell by 28% in 2 months (Feb – Apr) as the Scam came into light.
The Crash that Shook the Nation 176 points fall in the sensex
on march 1st, 2001. Prior day union budget tabled
prompted 177 sensex points increase.
SEBI launched immediate investigations.
SEBI inspected the books of several brokers suspected of triggering the crash.
RBI ordered some banks to furnish data of Capital market exposure.
BSE President Anand Rathi’s resignation added to continued downfall of sensex.
Opened debate over banks financial capital market operations, Lending funds against collateral security, Dual control of co-operative banks
Ketan Parekh was arrested by CBI on 30th March 2001. He was charged befrauding Bank of India by almost $20 Million
Another sensex fall of 147 Points
Working of BADLA System
A Fund Mechanism
Factors that helped the man
SEBI’s role after the
scam
Conclusions
