Sebi court rejects Ketan Parekh’s plea for closure of payment default case
Source: Business Standard
Parekh, in his plea, stated that the complaint had been filed in 2003 for the alleged violation dated 1997. | Photo: Shutterstock
A special court here has rejected former stock market broker Ketan Parekh’s plea for the closure of a case initiated against by Sebi for not paying a penalty imposed by the markets regulator, noting the accused prima facie violated the norms “intentionally”.
The special judge for cases under the Securities and Exchange Board of India (Sebi) Act, RM Jadhav, in an order passed on October 4, ruled that Parekh’s plea for compounding of the case against him “is unwarranted and uncalled for”.
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Sebi initiated a criminal case against Parekh after he failed to pay the penalty for violating the board’s regulation. In response, Parekh filed an application before the court for closure of the case by compounding.
Parekh, in his plea, stated that the complaint had been filed in 2003 for the alleged violation dated 1997.
Almost 25 years lapsed since the alleged violation. They offered to pay whatever amount sought by the board, Parekh’s lawyer submitted before the court.
“The applicant desires to compound offence and is willing to pay the subject matter of the present complaint by satisfying the norms and factors stated by the Sebi,” Parekh submitted through his lawyer.
Parekh contended that on previous occasions too cases against him were closed after payment of the fine. Until now he has paid a fine of Rs 3.37 crore.
However, Sebi argued that Parekh, through his associates and investment companies, placed orders in large quantities exceeding the prevailing market price and also cornered a large pool of shares through the off market deals.
Further, the shares were sold in large volumes at a manipulated high price of scrips, causing the stock market to crash, the board submitted.
Considering the gravity of the offence, the accused were debarred from entering the stock market. However, they dealt in the stock market for which the adjudication order imposing penalty was passed, according to Sebi.
The court noted, “prima facie the acts of the accused in violating the rule of regulation of Sebi are intentional”.
Further, there is a violation of the Sebi rules and regulations by the accused even after the debarment for 14 years, the court stated.
“The accused is alleged to have travelled abroad without seeking permission of 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.
Considering the facts and circumstances, the judge noted that the Sebi was justified in opposing Parekh’s plea.
“On the contrary having due regard to the nature of allegations, and conduct of the accused, I found that the compounding of the offence is unwarranted and uncalled for,” the court observed and rejected the plea.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Oct 09 2024 | 10:56 PM IST
