Dalal Street never believed that Ketan Parekh , widely referred to as KP, left the market. And now a 'secret' report by the Intelligence Bureau appears to confirm the fact.
According to the report, ‘KP’ has been ramping up different stocks and placing some of them at inflated prices to large institutions, like LIC, through little-known investment entities, market operators and a string of loyal brokers.
The posterboy of the technology shares-led bull run in 1999-00 , KP is said to be using front entities to trade in shares, like Orchid Chemicals , GMR Infrastructure, Cairn India, Deccan Chronicles Holdings, Reliance Industries, Punj Lloyd , Indiabulls Real Estate, Pipavav Shipyard, Amtek Auto, Hindustan Oil Exploration, UCO Bank , State Bank of India, EIH and JSW Steel , among others.
He is said to have been instrumental in ramping up the share price of SKS Microfinance from Rs 850 to Rs 1,100 soon after its listing in August, the report claims. Also, in collusion with Kolkata-based associates, KP is said to have rigged IPOs of little known companies by buying out 50% of the issue . The report did not identify the sources of its information. Its authenticity was confirmed by people familar with it.
The Intellegence Bureau, which traces its origin to the British Raj, and is in charge of intelligence related to internal security . In the recent past, with the liberalisation of the Indian economy, it has started monitoring the capital market. In a case involving share placements, one Raju Bartar is said to have identified two foreign institutional investors for a qualified institutional placement in Edserv. The understanding, according to the IB report, that the promoter would later return the amount to Bartar, and proceeds from the sale of shares would be shared.
Subsequently, around 50% of the issue was placed with Sparrow India Fund, the report added. A senior official of Edserv denied links to any Raju Bartar, saying that the QIP was done in accordance with Sebi regulations. ET was not able to obtain any phone numbers or email of Mr Bartar.
The report doesn’t claim there was anything illegal in Sparrow picking 50% of the issue. The report alleges that Mumbai-based proprietary investor Sanjay Dangi colluded with the promoter of Welspun Corporation to ramp up the stock price, and that Dangi, along with the promoter of a domestic broking firm and a foreign fund, were trying to “inflate” the prices and get the Life Insurance Corporation to buy the stock at higher levels.
Dangi is also said to have been active in shares of Prakash Steelage, Amar Remedies , Sahyadri Industries , Core Projects and Panasonic Home Appliances. Mr Dangi denied allegations of stock price rigging and that he had placed the shares of Welspun Corporation with institutional investors “in the normal course of business” . Welspun, too, denied the charge.
Source: ET
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