THE KETAN PAREKH SCAM

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The Ketan Parekh Scam                                                                                                                              

The Ketan Parekh scam was the second most important scam that rocked the Bombay Stock Exchange after the Harshad Mehta scam. To make matters worse, Ketan Parekh was himself a proof of Harshad Mehta and had learned stock trading from the pied piper of Bombay Stock Exchange himself. As a result, he was able to achieve a similar feat as compared to what Mehta himself had accomplished.

When he was believed to be single hand driving the stock market. The low profile Indian stock market was suddenly once again making headlines all over the world. Later it turned out that it was broker turned operator Ketan Parekh that was driving the market and not changes in the fundamentals .Ketan Parekh was a proof of Harshad Mehta. However, in his demeanor he was nothing like Mr Mehta. He was a soft spoken, unassuming guy that you would mistake for being an average person on the street. However, in reality his associates and competitors describe him as being particularly shrewd and ruthless. Unlike, other brokers, there would be no build up or warning of Ketan Parekh’s moves. He would take the market by storm and raise or drop the prices of stocks in an instant by suddenly unleashing lots of money in the market.Ketan Parekh had a cover story to back his unscrupulous dealings and throw skeptics off track. He was said to be a believer of the Information, Communication and Entertainment sector i.e. the ICE sector. This was nothing special given the fact that late 90’s and early 2000’s were the time when the IT boom took place and these were the stocks which were actually growing by leaps and bounds worldwide .Ketan Parekh was looking out forstock which had low market  capitalization and liquidity .He would then pump money into these shares and start fictitious trading within his own network of companies. The average person on the bourses may begin to believe that his stocks were rising and they too would start investing driving the prices even higher. Then, as the market took over Ketan Parekh would liquidate his holdings slowly, once again making less noise than his mentor Harshad Mehta would have done.