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CBI custody for Ketan Parekh extended till April 12

Leading stock broker Ketan Parekh, his relative, Kartik Parekh, chairman of Madhavpura Mercantile Co-operative Bank Ramesh Parikh and the manager of Madhavpura bank's Mandvi branch J B Pandya were on Monday further remanded to CBI custody till April 12 for allegedly defrauding Bank of India of Rs 1.37 billion in a pay-order scam.

Ketan and Ramesh were remanded to CBI custody, while the other two were remanded to judicial custody till the same period by designated judge A R Joshi.

All the four filed bail petitions through their lawyers I P Bagadia, Avinash Rasal and Vijay Garg. The CBI prosecutors Bharat Kumar Raghuvanshi and Gul Asnani sought time to reply on April 12.

CBI prosecutors submitted that Madhavpura bank had issued 13 pay orders on March 8 and 9 which were purchased by Bank of India's stock exchange branch and credited in the accounts of firms belonging to Ketan Parekh.

When pay-orders were sent for clearance, RBI returned them because Madhavpura bank failed to meet the liability and also did not participate in the clearing on that day, CBI alleged.

On the other hand, after getting immediate credit, the funds so generated were transferred by accused to Chitrakoot Computers, Goldfish Computer and Nakshatra Software in which Ketan and his family had controlling interest, CBI submitted.

Ketan Parekh was earlier remanded to CBI custody till April 9 and was not allowed to meet his family members during the period.

The CBI submitted that pay orders were like cash transactions which were backed by guarantees and they could not be returned unpaid. But in the instant case of 13 pay orders issued by Madhavpura bank on March 8 and 9, they were returned unpaid because of insufficient funds.

During investigations it was found that all the pay orders had been issued fraudulently and unauthorisedly by J B Pandya (bank's manager) without sufficient funds to favour Ketan Parekh at the instance of co-accused Ramesh Parikh, the CBI contended.

However, during interrogations both (Ramesh and Pandya) were blaming each other, CBI submitted. Ramesh, Ketan and Pandya were confronted with each other. Pandya said he had been pressurised by Ramesh in accommodating Ketan, while Ramesh denied having done so.

The CBI told the court that Ketan Parekh had confirmed talking to Ramesh and the bank's managing director Devendra Pandya (reportedly missing) for fraudulently accommodating him to come out of the payment crisis.

Ramesh, however, denied having approved Ketan's request and has put the blame on Devendra Pandya.

During investigation it was further found that Ramesh is directly connected to Madhur Shares and Stocks and was controlling its operations. It was a broker company of Ahmedabad Stock Exchange and there were transactions to the tune of Rs 3 billion to Rs 4 billion involving shares and stocks with certain companies of Ketan Parekh, CBI alleged.

Thus, there was a nexus between Ketan, Ramesh and Pandya which needed to be probed into, CBI alleged.

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