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Sebi asks SEs to check Ketan’s book of accounts

Rakesh P Sharma & Janaki Krishnan

The Securities & Exchange Board of India has written to all leading stock exchanges asking them to furnish details of Ketan Parekh’s books of accounts and of accounts of firms associated with him.

The securities regulator has sought information from the exchanges as to whether the books of accounts of the broker and his group have been inspected in the recent past.

Further, it has also asked for details of the kind of deficiencies found in the broker’s accounts and what kind of action has been taken. The stock exchanges have been asked to respond within two days.

According to sources, the information has been sought following questions raised by the Joint Parliamentary Committee as to whether the broker’s books of accounts were inspected by the exchanges.

Sources said the need for scrutiny was raised again owing to market reports that Parekh might be back in the markets. The outcome of the inspections is expected to provide an answer to his current status in the market, considering he is not officially supposed to be trading in the market.

Parekh, it may be recalled, was barred from the stock markets from April this year, along with his associated entities.

Sebi had undertaken a detailed scrutiny of Ketan Parekh’s transactions in the stock markets following the markets crisis in March this year. However, the exchanges are expected to undertake a routine kind of inspection of the accounts of brokers.

Sebi’s investigations were much more specialised and tended to focus on the inflow and outflow of funds and their utilisation of funds in the market to check whether these funds were used to manipulate scrip prices.

Sebi is also trying to find out whether any other operator is trading in the market using Parekh’s name as a red herring. One way to do that, Sebi sources said, is to look for clues in Parekh’s former associates.

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