Meanwhile the other sordid player in the news Global trust Bank is creating waves of a different kind as the SECURITIES and Exchange Board of India has written to the Mauritius Offshore Business Activities Authority (MOBAA) asking for details of the source and utilization of funds of overseas corporate bodies mentioned in the regulator's preliminary investigation report into the stock market scam.
And in return SEBI has been informed by the Mauritius Offshore Business Activities Authority that it would be able to provide these details shortly. The regulator has said there are strong indications that Ketan Parekh has used these entities for allegedly cornering parking stocks.
The securities market regulator has informed the JPC that it has provided details, including relevant portions of its preliminary investigation report, and details of bank accounts of these OCBs in Mauritius to help the MOBAA in gathering and furnishing details which the Indian stock market regulator is seeking and also said that it is in constant touch with MOBAA.
However, THE SEBI has not contacted the Central bank of Mauritius, which is called the Bank of Mauritius for any details, and SEBI has said as a member of the International Organization of Securities Commissions, it has been cooperating with market regulators across the world and also said at the time of registering FIIs, it does write to the parent regulator of the concerned FII to get a feedback on the applicant's conduct. However, the regulator does not have any formal agreement for sharing information with the Bank of Mauritius.
In its preliminary report, Sebi had mentioned five OCBs which had carried out large transactions in some of the scrips associated with Ketan Parekh and further investigations, have revealed another six OCBs, which too carried out large transactions in the scrips associated with Ketan Parekh and they are >> Dossier Stock, Greenfield Investment, AOM Investment, Symphony Holdings, Almel Investments and Delgrada. SEBI has said trading details of these 11 entities have been obtained and are being processed and also there are indications of inter-linkages among these OCBs. SEBI has said there are also indications of issuance of participatory notes by some of the FIIs/sub-accounts/other entities connected with Ketan Parekh.
The cake however is that SEBI and the Reserve Bank of India differ on who regulates OCBs, SEBI has told Joint Parliamentary Committee probing the stock market scam that in its opinion, OCBs come under RBI's regulatory jurisdiction.
GTB's 'fast sanctions' TO COME UNDER RBI investigative net
THE RESERVE Bank of India will begin a special investigation on the 'fast sanctions' done by Global Trust Bank between July 2000 and March 2001 and in this regard a senior RBI official met GTB management in Hyderabad on Saturday (21/07/2001) in this connection. The RBI has not revealed the gist of the same, it is understood that the regulator is taking a closer look at the high and sudden exposures taken by the bank during the crucial period leading up to the stock market scam.
The entire game is going at a suspenseful pace like a crime thriller as a RBI team comprising six officials is inspecting the books of GTB offices in Fort and Nariman Point to figure out the role of the private bank in the huge remittances carried out by five overseas corporate bodies through their accounts with GTB. With investigations underway, sources could not confirm whether there has been any violation of foreign exchange regulations by GTB, which has been used as a conduit by the OCBs linked to the disgraced broker Ketan Parekh.
However, there is a distinct possibility that the bank may be held for failing to take adequate steps in checking out from the source of such huge funds and in a two-year period up to March 2001, the OCBs brought in Rs 777 crore and repatriated Rs3, 700 crore. Their investments were primarily in the K-10 stocks. The RBI has been underscoring the 'know your client' norms that banks are required to follow to check money laundering and under this, banks are required to crosscheck where the funds are emanating from particularly if there is a sudden spurt in flows in the accounts and this has been made known about a year ago by the regulatory authority.
A banker familiar with the tricks of the trade said that even if the documentation related to exchange control regulations are in place, the private bank may be pulled up for closing its eyes on such fund transfers.
The five OCBs reportedly connected to Parekh are Wakefield Holding, Brentfield Holding, Kensington Investment, European Investment and Far East Investment.
Bankers feel that the NRI investment in secondary markets is emerging as possibly the most efficient way to violate foreign exchange norms, compared with the traditional avenues reported to by the hawala operators and the central bank has been asked by the Joint Parliamentary Committee probing the stock market scam to carry out a probe on GTB's role in the OCB issue.
While it is customary procedure for OCBs to run accounts to route their investments in Indian markets, the regulatory authorities and the House panel are examining whether there was a nexus between the OCBs, GTB and Mr Ketan Parekh. The concerned OCBs were granted permission by RBI to operate for five years under the portfolio investment scheme through non-resident (external) accounts
SEBI says that GTB sold shares to Ketan
HEAR THE NEWS >> The regulatory authority SEBI has claimed that promoters of Global Trust Bank appear to have sold shares to Ketan Parekh group entities during September-December, 1999. The securities market regulator has informed the Joint Parliamentary Committee probing the stock market scam that the shares sold by the promoters between September-December 1999 were bought from two overseas corporate bodies (OCBs) - Hembrecht & Quist and TA Berhed of Malaysia.
SEBI has said that it is further probing this aspect and an interim report on the same would be submitted shortly. Hembrecht and Quist is a well-known US-based venture capital fund, which had a stake in GTB and it together with TA Berhed had a 13 per stake in GTB, they exited by selling to the promoters in 1999 and these transactions were widely reported at the time.
SEBI has been probing suspected price manipulation in the GTB scrip by Ketan Parekh and his group entities and is also investigating possible insider trading AND SEBI had asked stock exchanges to look into the rise in the GTB scrip during 1999-’00. The regulator called for the entire order log and trade log from both the National Stock Exchange and the Bombay Stock Exchange and said that an analysis of this order and trade data has revealed that the promoters sold shares during September December 1999 to entities associated with the Ketan Parekh group.
SEBI has further said that its investigations have so far revealed that Ketan Parekh subsequently sold a substantial quantity of GTB shares during October-December,’00 when the GTB scrip experienced a sustained rise and crossed the Rs 100 mark.
SEBI reveals that Ketan Parekh not cooperating
The major and main hat in the entire drama of money laundering act Ketan Parikh is said to not cooperating fully with SEBI and this was confirmed by SEBI to the Joint Parliamentary Committee probing the stock market scam. Sebi has been probing Ketan Parekh’s role in the recent stock market scam, he is being investigated for allegedly manipulating share prices and violating the takeover code.
In its response to queries from the JPC, Sebi has said that it is being forced to seek information on Ketan Parekh’s holdings from third party sources like depositories, stock exchanges and brokers, since the big bull is not cooperating with investigations and SEBI has claimed that prima facie it appears that Ketan Parekh acquired stakes in excess of 5 per cent in companies like Global Trust Bank, Aftek Infosys and Shonkh Technologies International without informing the concerned companies, which is a violation of the takeover code.
Investigations with regard to some other companies are still in progress AND also said that it is not possible for it to find out the exact number of shares acquired by entities belonging to the Ketan Parekh group in Global Trust Bank owing to the alleged lack of cooperation by Ketan Parekh.
SEBI says it has been able to detect investments made by Panther Fincap & Management Services Ltd, an associate of the Ketan Parekh group, which alone has bought more than 5 per cent of GTB’s equity, but the regulator is not able to get a fix on the total quantum of shares bought by the Ketan Parekh group entities in GTB.
So much for the drama of money here and then there, a drama of pure laundering by a man Ketan Parikh with the help of chums GTB and others, HAS PUT THE NAME OF INDIA to shame in the comity of world nations. In the BHAGAVAD GITA LORD Krishna SAID THAT in the evil age (the present Kali Yuga) people as above will have a free run and the norms of honesty and truthfulness would be put to the back bench, it is an age of doom and destruction in which evil pervades over righteousness.
He also said that when the values of virtue and morality declines he comes to planet Earth and takes birth ….but SIR this is the time and the sooner the LORD comes the better as to otherwise the world would plunge into a deeper morass of irrecoverable proportions.
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