The Bombay High Court on Tuesday sentenced stock brokers Ketan Parekh and Hiten Dalal along with five others to one year rigorous imprisonment while two other accused were sentenced to six months imprisonment in the 1992 Canfina scam.
All of them are out on bail, and Justice V M Kanade of the special court (For trial of Offences Relating to Transactions in Securities Act) extended their bail till July 31, to enable them file appeals in the Supreme Court.
Parekh's name surfaced for the first time through the scam, in which the accused had entered into a criminal conspiracy to 'siphon off Rs 47.7 crore (Rs 477 million).'
"Had he been convicted and jailed earlier, he would not have commited other offences," Justice Kanade said, in reference to Parekh's involvment in later scams.
The modus operandi of the scam was as follows: Huge amounts of money was transferred from Banglore-based Canbank Financial Services (Canfina), a subsidiary of Canara Bank, to Mumbai-based Canbank Mutual Fund (CBMF) (another subsidiary of Canara Bank) between October 1991 to January 1992.
This was purportedly for the purchase of government securities for Canfina, but in reality the money were transferred to the accounts of Parekh, Dalal and other three stock brokers, namely S K Jhaveri, Pallav Seth and Navinchandra Parekh, who is Ketan's uncle.
The brokers used the money -- to the tune of Rs 47.7 crore -- for investing in stock market. At the end of the financial year, the money was returned to Canfina.
Court, on March 13, convicted the five brokers along with Canfina's former assistant vice presidents Sainath Mohan, M K Ashok Kumar and former general manager of CBMF B R Acharya for criminal conspiracy, misappropriation of funds and cheating.
Earlier, on November 12, 2007, the Securities and Exchange Board of India had barred Ketan Parekh and his associates, who were instrumental in the stock scam of 1999-2001, from accessing the stock market for another ten years.
Sebi, in an order issued on Monday, said it was banning Ketan Parekh and associates for a total of 14 years, effective from December 12, 2003.
Sebi conducted investigations into the dealings of scrips of Himachal Futuristic Communications, Zee Telefilms, Adani Exports, Global Tele-Systems, Ranbaxy Laboratories, Shri Adhikari Brothers Television Network, Shonkh Technologies International, Padmini Technologies and Aftek Infosys during the period October 1999 to March 2001.
The investigations revealed that Ketan V. Parekh and 17 other entities who were directly or indirectly associated to him were involved in the manipulation of these scrips.
Ketan V. Parekh was found to be the master mind behind all the acts of omission or commissions by these entities, the Sebi order said.
The ten associates Kartik K. Parekh, Classic Credit, Panther Fincap and Management Services, Luminant Investment, Chitrakut Computers, Saimangal Investrade, Classic Infin, Panther Investrade , Goldfish Computers Pvt, and Nakashtra Software have also been barred from accessing the securities market directly or indirectly, for a period of 14 years, the Sebi order said.
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