Monday, April 2, 2001,
Chandigarh, India


M A I N   N E W S

CBI begins scrutiny of scam papers
Parekh’s questioning on

New Delhi, April 1
The CBI has begun a scrutiny of documents pertaining to the Rs 843-crore stock market scam, including the Rs 137 crore pay order scandal involving leading stock broker Ketan Parekh, highly-placed CBI sources said here today.

They said CBI sleuths of the Bank Securities and Fraud Cell were probing the account books of Madhavpura Mercantile Cooperative Bank and alleged Ketan Parekh had caused a loss of Rs 843 crore to the bank.

The sources said Reserve Bank of India officials were also helping the agency find the exact ramifications of the scam.

The CBI Director, Mr R.K. Raghavan, said “more arrests are likely as the agency is still gathering more information and Parekh’s questioning is going on.”

Besides Ketan Parekh, the CBI had also arrested his cousin Kartik Parekh and manager of the cooperative bank Jagdish Pandya.

Kartik, Director of Panther Investrade Ltd, was arrested by the CBI late last night after intense questioning, the sources said.

The CBI is also in hot pursuit of Cooperative Bank Chairman Ramesh Parekh who has reportedly “absconded” after Ketan’s arrest.

Referring to role of some Bank of India officials in the scam, the sources said, “The FIR names an officer, who is yet to be identified, of the bank being involved in it.”

The sources said the agency was also probing Ketan Parekh’s alleged links with the recently surfaced bullion scandal in Ahmedabad in which two gold dealers were named as persons involved in taking gold from the Bank of India’s overseas branch after submitting pay orders issued by Classic Cooperative Bank.

About the incidents leading to the unravelling of the case, the sources said in the second week of March, when the Bank of India sent the pay orders issued by the cooperative bank’s Mandvi branch to the Reserve Bank of India, officials of the mercantile bank did not participate in the clearing.

They said so far, the investigations revealed that Parekh was into this business for the past six months and had been incurring a loss since then due to heavy investment in the stock market.

They said only when the stocks purchased by him dipped very low, the chain of keeping the money in circulation snapped, which created a big hole in the Madhavpura bank’s kitty.

Meanwhile, Kartik Parekh, was today remanded in CBI custody till April 9 by a Mumbai holiday court. PTI

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