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Ketan remanded for 4 more days

Our Bureau

MUMBAI, April 9

MR Ketan Parekh, the stockbroker accused in the pay-order scam, was today remanded to CBI custody for four more days, till April 12.

The remand of Mr Ramesh Parikh, Chairman of Madhavpura Mercantile Co-operative Bank (MMCB) and co-accused in the case, was also extended till April 12.

The other two accused, Mr J.B. Pandya, Manager, MMCB, and Mr Kartik Parekh, relative of Mr Ketan Parekh, were remanded to judicial custody.

``It has been disclosed till this stage that MMCB had aided and abetted Ketan Parekh in his speculative deals in the share market by utilising funds of Bank of India unauthorisedly and fraudulently,'' the Central Bureau of Investigation (CBI) told Mr A.R . Joshi, the Sessions Court Judge.

The CBI said investigations revealed that Mr Ketan Parekh had several accounts with MMCB's Mandvi branch headed by Mr J.B. Pandya. The CBI said all the 13 pay orders, totalling Rs 137 crore, that were returned unpaid were ``signed and unauthorisedly and fraudulently issued by J.B. Pandya, without sufficient funds, for illegally accommodating Ketan Parekh at the instance of Ramesh Parikh''.

The agency said that during investigations Mr Ramesh Parikh and Mr J.B. Pandya kept blaming each other. Mr J.B. Pandya maintained that he had been pressured by Mr Ramesh Parikh to accommodate Mr Ketan Parekh, but Mr Ramesh Parikh kept denying it. However , the CBI said, Mr Ketan Parekh had admitted that he had been talking to Mr Ramesh Parikh and Mr Devandra Pandya, the Managing Director of MMCB, who is yet to be arrested.

Mr Ramesh Parikh's counsel argued that his client, being the Chairman of the bank, is only involved with the decisions the board of directors takes and that issue of pay orders is never referred to the board. Mr Ramesh Parikh is not involved with `such' executive decisions and the Managing Director has never brought it to the board level, the counsel argued.

The CBI said investigations further revealed that Mr Ramesh Parikh is directly connected to and controlling and managing Madhur Shares and Stock Pvt. Ltd, a broking outfit registered with the Ahmedabad Stock Exchange. It said there were transactions runn ing to Rs 300-400 crore, involving shares with certain companies of Mr Ketan Parekh.

The agency said Mr Ramesh Parikh also runs another company, Madhur Food Products Ltd, which had made a public issue. ``Thus there is a definite criminal nexus between Ketan Parekh, Ramesh Parikh and J.B. Pandya,'' the agency maintained.

Investigation into the end-use of the funds showed that a sum of Rs 70 crore out of the amount defrauded has gone back to various accounts of Mr Ketan Parekh with MMCB, Mandvi branch. About Rs 12 crore went to Global Trust Bank, Rs 32 crore went to vario us other stockbrokers, who are yet to be examined, and pay orders worth Rs 30 crore were issued to various parties, the CBI said.

It said the investigation was at a crucial stage. While several vital leads have been ascertained, some were yet to be ascertained.

Pic.:Stock broker Ketan Parekh being produced in a court in Mumbai on Monday.

Picture by Paul Noronha