Notorious market operator Ketan Parekh, once jailed for manipulating the stock exchange, is in the news again. According to SEBI investigations, Parekh planned a strategy to front-run a foreign fund’s trades for illicit gains alongside Rohit Salgaocar, an Indian-Singaporean citizen.
Parekh never worked in any trades, but his accomplices in Kolkata carried out the operations.
SEBI banned Parekh, Salgaocar, and 20 other companies, besides ordering them to pay back Rs 66 crore they obtained through unlawful gains. It is reported that to execute FPI trades for a commission, Salgaocar also has referral agreements with Nuvama and Motilal Oswal Group.
A major US-based asset management company has multiple funds registered with SEBI as foreign portfolio investors, according to SEBI investigations.
Reports added that Salgaocar would direct dealers at Motilal Oswal and Nuvama to execute the trades as soon as he received orders from the US-based fund. Before the actual deals by the dealers at Motilal Oswal and Nuvama, Parekh would communicate trade-related critical information to his different conduits in Kolkata, who would then execute the trades based on inside information.
SEBI investigations revealed that Parekh would frequently change his phone numbers. His nexus used various pseudonyms like ‘Jack’, ‘John’, ‘Boss’, ‘Bhai’, ‘Well-wisher’ to save Parekh’s numbers in their phones, media outlets reported. To confirm Parekh’s identity, SEBI examined chats, texts, hotel bookings, IMEI numbers, mobile phone locations, and even birthday messages. Money was transferred between the entities using angadiyas, or unofficial financial transfer routes assisted by people acting as messengers.
Additionally, both Parekh and Salgaocar acknowledged to SEBI investigators that they communicated daily. It was uncovered that Parekh, who operated under the nickname KP, had conduits who received information about deals shortly after their meetings, which Salgaocar then relayed to the dealers at Motilal Oswal and Nuvama. Links between Parekh and several accomplices were also established through bank accounts associated with other organisations.
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