Harshad Mehta is notorious for arranging the biggest securities exchange outrage. Following his trick, one more critical monetary bad behavior happened in 2001, drove by Ketan Parekh, who had recently been related with Harshad Mehta as his protege. Following the Harshad Mehta embarrassment, the Ketan Parekh trick arose as the second huge occasion that shook the Bombay Stock Trade. Ketan Parekh, who had gained exchanging strategies from Harshad Mehta, basically duplicated the very techniques that Mehta had utilized 10 years or so prior. Tragically, the result reflected what had come upon Harshad Mehta.
Ketan Parekh, a contracted bookkeeper, took command of his family’s financier business. Like Harshad Mehta, during his prime, Parekh employed significant impact in the securities exchange and habitually drew in with the heads of large companies.
He had a significant cognizance of the ‘Siphon and Dump’ system, utilized by Harshad Mehta, yet he tried to carry out it with a turn. Generally, ‘Siphon and Dump’ is a false plan in the financial exchange where an unmistakable financial backer at first drives up share costs and in this manner, when the stock arrives at its pinnacle, exits by auctioning off every one of the offers.
Ketan Parekh was known for tempting financial backers with possibilities through reasonable stocks. Around the mid 2000s, Parekh predicted the quick development of the IT area in the nation, provoking him to put resources into IT stocks. To take advantage of this open door, he designated more modest organizations and created significant benefits through the ‘Siphon and Dump’ approach.
Therefore, Ketan Parekh kept on looking for stocks described by low market capitalisation and restricted liquidity. He would then pipe assets into these offers and participate in insider exchanging inside the organizations through his broad organization.
The securities exchange became mindful of Ketan Parekh’s false exercises when the Mumbai part of the Bank of India blamed him for cheating them of Rs 137 crore. This disclosure set off a huge decline in the financial exchange. In this manner, when the Save Bank of India (RBI) started an examination concerning Parekh’s exercises, he was seen as at legitimate fault for insider exchanging. Following this revelation, the Focal Department of Examination (CBI) captured Ketan Parekh.
Ketan Parekh had to deal with penalties of controlling offer costs. After an exhaustive examination, the market controller forced a restriction on his support in the securities exchange. All the while, the court gave over a jail sentence for his activities. As per media reports, Ketan Parekh was liable for coordinating a trick of roughly Rs 40,000 crore through these misleading strategies.
