M A I N   N E W S

CBI arrests Ramesh Parekh
SEBI cracks down on Ketan’s companies

New Delhi, April 5
The Central Bureau of Investigation today arrested Madhavpura Cooperative Bank Chairman Ramesh Parekh for his role in the Rs 137-crore pay order scam case in which big bull Ketan Parekh is the prime accused, agency sources said here.

Officials said Ramesh Parekh had come to the CBI office in Mumbai to surrender, but as soon as he arrived, he was taken into custody.

With this, the total number of people to be arrested in the case has risen to four, the other three being Ketan Parekh, his cousin Kartik Parekh and Manager of Madhavpura Cooperative Bank Jagdish Pandya.

The agency has also interrogated Ketan’s another cousin, Kirit Parekh, suspended assistant General Manager of the Bank of India B.H. Somaia and Deputy Chief Manager of BOI Suvarna. Investigation by the agency has revealed that the Madhavpura Cooperative Bank Chairman had issued pay orders worth Rs 137 crore to Ketan Parekh.

Ramesh Parekh had absconded along with Chief Executive Officer of the bank D.B. Pandya since the scam broke out. Pandya is still untraceable.

Soon after taking him into custody, the CBI interrogated him.

According to the official, Ramesh Parekh has claimed he had been in Bhavnagar visiting a relative.

Ramesh Parekh was described to be “absconding” by the agency for the past two weeks subsequent to the surfacing of the pay order scam in March.

The CBI had raided his residence and business establishments in Ahmedabad and seized documents relating to the scam that triggered panic withdrawals of depositors from about a dozen cooperative banks in Gujarat.

About the Managing Director of the Madhavpura bank, the CBI said, ‘’We have not been able to locate him at his office and residential address... But he will be interrogated.’’

The CBI has accused Ketan Parekh and his relatives of conniving with officials of the Madhavpura bank and fraudulently obtaining pay orders amounting to Rs 137 crore. These pay orders were presented to the BOI but were not honoured by the Reserve Bank of India as the funds had already been siphoned off to the big bull’s companies with the involvement of BOI officials.

Ketan Parekh is understood to have told the CBI interrogators that the pay order transactions with the Madhavpura bank had been going on for the past seven months.

The payment crisis in the market and the subsequent developments which witnessed a series of reports against him and the bank in the media led to a cash crunch, he said adding that otherwise the scam would not have happened.

He even agreed to repay Rs 137 crore to the BOI, if asked to do so.

Ketan Parekh was arrested by the Bank Securities and Fraud Cell of the CBI on Friday following a complaint by the Bank of India that the pay orders in his name had been dishonoured.

Meanwhile, exactly a week after leading stock broker Ketan Parekh’s arrest, the Securities and Exchange Board of India (SEBI) has finally cracked down on his broking and merchant banking entities by barring them from taking up fresh business with immediate effect.

The capital market regulator has barred four firms from doing fresh transactions following allegations of price manipulations in various scrips, including his favourite “ice” stock.

“We have passed the necessary orders against Triumph Securities, Triumph International, N.H. Securities and Classic Share and Stock Ltd restraining them from picking up fresh business with immediate effect,” sebi sources said here today.

Prima facie, the securities firms were found to be involved in the price manipulation and orders were issued under Section 11 B of the sebi Act in the interest of investors, they said.

The securities firms would be heard at a post-decisional hearing on April 16, sources added.

Capital market regulator had looked into the allegations of price manipulation by Parekh, now in CBI custody in connection with the Rs 137 crore Bank of India pay order scam. UNI/PTI