A special court in Mumbai has recently denied a request from former stock market broker Ketan Parekh to close a case initiated by the Securities and Exchange Board of India due to non-payment of penalties.
Special Judge R.M. Jadhav ruled that Parekh “prima facie violated the norms intentionally,” justifying the court’s decision.
The case, filed under Section 24(1) of the Securities and Exchange Board of India Act, 1992, involves allegations against Parekh and several associates, including Classic Credit Limited, Panther Fincap and Management Services Ltd., and Saimangal Investrade.
They are accused of breaching SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995, with violations dating back to 1997.
In his plea, Parekh highlighted that he had already settled compounding charges amounting to ₹3,37,55,140 in other matters, showcasing his willingness to resolve current issues without a trial. His lawyers, Sanjog Parab and Mohan Rao, argued that the complaint was filed in 2003 nearly 25 years after the alleged infractions and expressed Parekh’s readiness to pay any amount demanded by SEBI.
However, Special Public Prosecutor Anubha Rastogi countered, asserting that Parekh, through his companies, engaged in manipulative trading practices, such as placing orders significantly above market prices and cornering shares through off-market transactions, contributing to a stock market crash.
Rastogi noted that despite being banned from market activities for 14 years, Parekh continued to operate.
Judge Jadhav underscored the seriousness of the allegations, stating, “The acts of the accused in violating SEBI regulations are intentional.” He also remarked on Parekh’s failure to seek court permission before traveling abroad and noted that his presence was secured through a proclamation. The court highlighted Parekh’s disregard for previous orders.
Ultimately, the court sided with SEBI, concluding, “Given the nature of the allegations and the conduct of the accused, I find that compounding the offence is unwarranted and uncalled for,” leading to the rejection of Parekh’s plea.
