Big bull Ketan Parekh seeks re-entry into stocks ring
SC has deferred hearing on a plea by Parekh and his associates to end the 14 year exile imposed on them by market regulator SEBI.delhi Updated: Apr 22, 2007 12:19 IST
The Supreme Court has deferred hearing on a plea by big bull Ketan Parekh and his associates to end the 14 year exile imposed on them by market regulator SEBI for alleged manipulation of share prices and fictitious trading.
Parekh and eight of his associates have moved the apex court against the Securities Appellate Tribunal, which had upheld SEBI's December 2003 order banning them from dealing in securities market.
A bench comprising Justices SH Kapadia and B Sudershan Reddy, on Friday deferred the hearing by four weeks, after Parekh's counsel Rajesh Gupta sought a month's time to file a rejoinder to SEBI's submission on the matter.
SEBI argued that it was necessary to ban operations of entities controlled by Parekh, as they pose a threat to the integrity of the market and investors' interests.
It further submitted that a probe revealed that these entities indulged in, among others, manipulative activities such as synchronised trades, financing transactions that gave a semblance of purchase and sale of shares at the exchanges when there was actually none.
Besides, they were also found to be engaged in circular trading and creation of artificial volume and benchmarking of the prices of certain stocks by executing non-genuine transactions during the 1999-2000 period.
The bunch of petitions filed by Parekh, his cousin Kartik Parekh and its associate firms - Luminant Investment, Chat Computers, Classic Credit, Panther Fincap and Management Services, Saimangal Investrade, Classic Infin and Panther Investrade - stated that synchronisation or matching of trades was perfectly legal and permissible in the securities market.
"Every trade, whether executed on the platform of the stock exchange or off-market, must be matched as to the quantity and the price before it gets executed.
"All trades executed in this manner result in beneficial transfer of ownership of shares from the seller to the buyer. Mere volumes or value of transactions do not make such transactions illegal...," the petitions stated.
They added that the price discovery mechanism of the stock exchanges was not distorted as the trades were executed at the prevailing market prices and within the price restriction imposed by SEBI.
Parekh also submitted that the Tribunal's findings were based on "conjecture and surmise, speculation and hypothesis and not on evidence or proof."
He further alleged that SAT had discriminated against him vis-a-vis two other foreign entities like Credit Suisse First Boston and Dresdner Kleinworth Benson, who were let off with a lighter punishment for same offence.
While SAT had exonerated Parekh for the alleged price manipulation in the shares of Lupin Ltd during the April 1999- January 2000 period, it had found him guilty for violating SEBI (Prohibition of Fraudulent and Unfair Trade Practises Relating to Securities Market) Regulations, 1995.
SAT in its order had said that Parekh and his eight associates had rigged the market in a big way and the penalties imposed on them were quite reasonable having regard to the gravity of the charges proved.