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March 15, 2001
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Money > Business Headlines > Report March 15, 2001 |
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Sebi report sees Parekh hand in GTB price riggingRashmi Das & Bhupesh Bhandari The Securities and Exchange Board of India (Sebi) has found prima facie evidence against stock brokers in the price manipulation of the Global Trust Bank (GTB) scrip prior to the announcement of the merger of GTB and UTI Bank. The capital market regulator has submitted the evidence to the Reserve Bank of India in its preliminary report. Top Sebi officials said: "There is prima facie proof of the involvement of Ketan Parekh and his entities in the price rigging of GTB shares." GTB chairman Ramesh Gelli was not available for comment. The Sebi report is significant in view of the fact that RBI can exercise a veto over the merger plans of the two banks. According to Sebi officials, the market surveillance report indicates that Parekh was one of the biggest traders in the stock during October-November when the scrip surged from Rs 70 to Rs 120 before settling at Rs 90 by December. When contacted, Parekh dismissed evidence regarding price manipulation as ridiculous. "There was hardly any price movement in the bank scrip from the period August to December which continued to rule at a price band of Rs 80-90," he said, adding: "Our entities bought stocks well within the guidelines prescribed by RBI." Parekh further maintained that the shares were acquired in rolling settlement and price manipulation is not possible in such a settlement. On their part, Sebi officials pointed out that price manipulation can take place in a rolling settlement also. "The evidence makes it clear that prices were raised by substantial purchases in the scrip from October to December by Parekh and the entities he controls in order to secure a favourable share swap for GTB," officials added. A RBI spokesperson admitted that the preliminary report says that there is prima facie evidence of market manipulation and that Sebi has been asked to file a detailed report by March 31, if possible.
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