One of the biggest defaulters of Ahmedabad-based Madhavpura Mercantile Co-operative Bank, stock broker Ketan Vinaychandra Parekh has settled his dues with the bank by paying Rs 26 crore (Rs 260 million) a fortnight ago, revealed informed sources. The so called 'big-bull' of the stock market has paid a whopping Rs 396 crore (Rs 3.96 billion) in less than two years to MMCB.
Last month, the Supreme Court had rejected his application seeking more time to pay the money to the bank and had directed the Central Bureau of Investigation to arrest him if he failed to pay the final installment of Rs 26 crore within the stipulated bail period, which was likely to end in August.
The MMCB scam dates back to 2001 where the bank's former chairman, Ramesh Parikh, and Managing Director Devendra Pandya had allegedly favoured Parekh and his accomplices by issuing a loan of Rs 1,030 crore (Rs 10.3 billion). Parekh was not able to pay up the loan, so in 2001, the bank was forced to close down.
The Reserve Bank of India then appointed liquidator Ramchandra, who scrutinised documents and registered an offence in Ahmedabad's Madhavpura police station through his bank advocate Ajit Jadeja against Parekh and 10 others for embezzling Rs 1,030 crore (Rs 10.3 billion).
Parekh was granted bail by SC in May 2007 on the condition that he would repay a sum of Rs 396 crore (Rs 3.96 billion) to MMCB through a monthly installment of Rs 26 crore (Rs 260 million). While Parekh paid Rs 370 crore (Rs 3.7 billion) through regular installments, he had delayed his final installment for five months and sought more time to pay from the apex court, which was dismissed.
Following this, MMCB moved two other applications in SC requesting the apex court to cancel Parekh's bail and direct him to pay another Rs 579 crore (Rs 5.79 billion), which the bank feels is due from him since 2001.
The hearing on both these applications will come up before SC on August 27. While Parekh could not be reached for comments, sources close to him informed that he was likely to challenge MMCB's claim that he was liable to pay more money to the bank.