Sebi court rejects Ketan Parekh's plea for closure of payment default case

Dismissing Ketan Parekh's plea for closure of the payment default case, Special Judge RM Jadhav ruled that the accused "violated the norms intentionally".

In Short

• Court finds Parekh intentionally violated SEBI norms.
• Charges involve fraudulent practices dating back to 1997.
• Parekh offered to pay SEBI to settle without trial

A special court in Mumbai has turned down a plea from former stock market broker Ketan Parekh, seeking the closure of a case initiated by the Securities and Exchange Board of India (SEBI) for non-payment of penalties. Special Judge RM Jadhav ruled that the accused "prima facie violated the norms intentionally," leading to 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 contravening Regulations 4(a) and (d) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995. The charges date back to violations in 1997.

In his plea, Parekh pointed out that he had already settled compounding charges amounting to Rs 3,37,55,140 in other matters, demonstrating his willingness to resolve the current issues without 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 sought by SEBI.

However, Special Public Prosecutor Anubha Rastogi countered that Parekh, through his companies, engaged in manipulative trading practices, including placing orders significantly above market prices and cornering shares through off-market deals, which contributed to a crash in the stock market.

Rastogi emphasized that despite being debarred from market activities for 14 years, the accused continued to operate.

Judge Jadhav noted the severity of the allegations, stating, "The acts of the accused in violating the rule of regulation of SEBI are intentional."

"The accused is alleged to have travelled abroad without seeking permission from the court. The presence of accused Ketan Parekh is secured on proclamation. So, the conduct of the accused in not following the orders is also required to be noted," the court observed.

Ultimately, the court deemed SEBI's opposition to Parekh's plea justified, concluding, "Having due regard to the nature of the allegations and the conduct of the accused, I found that the compounding of the offence is unwarranted and uncalled for," leading to the rejection of the plea.