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April 6, 2001
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Probe into Gelli-Parekh links still on, says RBI

BS Banking Bureau

Global Trust Bank chairman Ramesh Gelli cannot escape the Securities & Exchange Board of India dragnet if he is found guilty of insider trading despite the merger with UTI Bank being called off. The Reserve Bank of India has not asked the markets watchdog to stop probing the alleged link of Gelli with stock broker Ketan Parekh.

"The question of calling off the probe does not arise. GTB has decided against going ahead with the merger and the RBI has merely informed the Sebi about the development. This is a communication between two regulators on the development of an on-going issue. We have not asked Sebi to stop investigations," said an RBI source.

The RBI had for the first time drawn Sebi's attention to the unusual movement of the GTB scrip in October last year. Formally, it had asked the markets regulator to conduct a probe into the issue immediately after the merger was submitted to the central bank of February 28.

RBI had asked Sebi to submit the report before the end of March. Sebi could not meet the deadline. However, it had submitted two interim reports on the alleged insider trading and market rigging.

Its second interim report, submitted on March 30, did not carry forward the investigation by an inch as it was a virtual repetition of the first report. It merely said prima facie there was a nexus between Gelli and Parekh and the markets watchdog was probing it.

In other words, there was no additional information provided by Sebi in its second report on the alleged GTB-Parekh nexus. With the merger being called off, Sebi is expected to take even longer to complete the probe.

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