The Ketan Parekh (KP) saga serves as a reminder of the stock market’s underbelly, with grisly shadows of people in power directing the narrative from behind the scenes. Once a prominent player, he was banned by the Securities and Exchange Board of India (SEBI) in 2003, following his links in a stock rigging scam, involving Madhavpura Mercantile Cooperative Bank, which surfaced in 2001.
Not that the ban subdued KP or put a lid on his aspirations. His operations continued undeterred and he kept sneaking back into the market.
SEBI, knowing the man, kept a vigil on front-running operations in the stock market. What followed was a shocking volume of incriminating data and WhatsApp communications connecting KP to a network of major traders. Clearly, he wasn’t done. If anything, he had become even more dangerous.
Reports alluded to the decorated Capital International Group, which allegedly depended on KP’s stock market expertise and networks for facilitating large, furtive stock transactions that intended to manipulate market movements. The group has publicly contested the accusations, claiming that his role was merely that of a stock warehousing facilitator rather than a participant in front-running or manipulative trading practices.
Meanwhile, as part of a massive crackdown, SEBI conducted raids in Kolkata and Mumbai, seeking to uncover KP’s network.
Co-accused Rohit Salgaocar provided another clue to SEBI’s investigations, revealing that 90% of big client trades were fulfilled by KP.
For the uninitiated, large-volume purchases have a larger impact cost, which worries big funds because it could raise the share price and, consequently, their average price. In order to get bulk shares within a specific price range, they employ agents such as Salgaocar. Large funds frequently engage in this approach, which is where KP’s mind is dug into. For almost 30 years, KP has been a smart market operator who has perfected the art of buying big shares from the open market without arousing suspicions.
However, the unexpected inertia in SEBI’s pursuit of KP raised eyebrows, triggering speculation of political interference and pressure from influential entities.
Given the stakes and monies involved, the pressure to go slow — an editorial indicates that the lull lasted 18 months —was understandable. SEBI’s assessment estimated KP’s ill-gotten gains to be approximately Rs 66 crores, though analysts argue that the actual figures are likely much higher. It points to a vast network of financial dealings and beneficiaries of illegally acquired wealth beyond what has been publicly investigated.
Come hell or high water, it’s increasingly obvious that KP is in no mood to stop. Has he thrown down the gauntlet at the system? Keep tracking this space for intriguing updates on the man.
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