Ketan Parekh Market Manipulation Scandal: Latest News
Ketan Parekh, a well-known figure in the Indian stock market, is once again making headlines for all the wrong reasons. The Securities and Exchange Board of India (SEBI) has uncovered a significant front-running scheme involving Parekh, who has a history of stock market manipulations. This time, he is working with Rohit Salgaocar, a Singaporean with Indian roots, in exploiting insider information for illicit gains. The investigation has uncovered a complex network of deception, leading to severe penalties for those implicated.
The Setup Revealed
SEBI’s investigation has shed light on how Parekh and Salgaocar carried out their scheme. The setup involved a major U.S.-based asset manager that had registered several funds with SEBI as foreign portfolio investors (FPIs). Salgaocar played a role as a consultant for this fund, providing valuable insights before they conducted trades in India. This arrangement gave him an unfair advantage.
Whenever Salgaocar received trade orders from the U.S. fund, he would first share this information with Parekh before passing it on to dealers at Motilal Oswal and Nuvama. This allowed Parekh to direct his associates in Kolkata to execute trades based on this inside information, effectively front-running the legitimate transactions executed by the dealers at Motilal Oswal and Nuvama. This manipulation resulted in illegal gains totaling nearly ₹66 crore.
SEBI Takes Action
In response to these findings, SEBI has taken swift action against Parekh, Salgaocar, and 20 other entities involved in the scheme. They have been banned from participating in the stock market and ordered to return the ill-gotten profits, amounting to roughly ₹66 crore. Additionally, the demat and bank accounts of all parties implicated have been frozen, preventing them from accessing their mutual fund investments.
During the investigation, it was revealed that Parekh frequently changed his phone numbers to avoid detection, and his associates used various aliases to conceal their communications. These evasive tactics underscore the extent to which Parekh and his network went to evade regulatory scrutiny.
Next Steps for the Parties Involved
SEBI has given the implicated parties 21 days to present their case and defend their actions. This period will be crucial for them to dispute the investigation’s findings. The repercussions of this case extend beyond the individuals involved, casting doubt on the integrity of the Indian stock market and the effectiveness of regulatory oversight.
As SEBI continues its investigation, the response from Parekh and his associates will be closely monitored. The outcome could serve as a precedent for future cases of market manipulation and insider trading in India. Financial experts are keeping a close eye on this scandal, recognizing that its impact could have long-lasting effects on investor confidence and market stability.
