Ketan Parekh, Hiten Dalal get 1-year RI

Express News Service

Posted online: Wednesday, April 02, 2008 at 2301 hrs

New Delhi, April 1: A special court (for Trial of Offences Relating to Transactions in Securities Act) today sentenced stock brokers Ketan Parekh and Hiten Dalal, along with four others, to one year rigorous imprisonment each, while two other accused were sentenced to six months simple imprisonment in the 1992 security scam case. However, Justice V M Kanade extended their bails till July 31, to facilitate their appeal in the Supreme Court. The stock brokers, along with top officers of Canfina, Bangalore, were convicted on March 7 in a Rs 47 crore securities fraud for “entering into a criminal conspiracy to dishonestly siphon off the funds of Canbank Financial Services (Canfina) in 1991-92”. This was the case where Parekh’s name surfaced for the first time. “Had he been convicted and jailed earlier, he would not have committed other offences”, Justice Kanade said, referring to Parekh’s role in later scams.

While the court awarded one year RI to Hiten Dalal, S K Jhaveri, Pallav Seth, Ketan Parekh, former Canfina assistant vice-president M K Ashok Kumar and former CBMF general manager in Mumbai B R Acharya, , the other two accused — broker Navinchandra Parekh and former Canfina assistant-vice president Sainath Mohan — were given six months’ simple imprisonment. The court, however acquitted former Canfina assistant vice-president N Balasubramaniam, the then CBMF assistant GM in Mumbai P J Subbarao and Vysya Bank scale-II officer B V Srinivasan as the charges against them had not been established.

Parekh’s lawyer Mahesh Jethmalani pleaded for a lenient sentence, arguing that his client and others were “small fries” and that such a scam “was not possible without the connivance of top financial officers”, who were never caught. Jethmalani added that since all the money had eventually been returned to Canfina, there was no actual loss. CBI prosecutors V G Pradhan and R S Mhamane, however, argued that the money which was wrongfully diverted consisted of “public funds and the court should award the maximum sentence prescribed so that the temptation to commit such offences would be rooted out”. Speaking to reporters later, Pradhan said that the sentences were “inadequate” and that he would advise the CBI to file an appeal for enhancement.

During conviction, the court held that all the convicted accused “executed three bogus fictitious and non-existent transactions on October 10 and October 22, 1991, and January 16, 1992, involving funds in the said transactions and diverted funds from Canfina to Canbank Mutual Fund (CBMF) and criminally misappropriated the proceeds”. The court observed that these proceeds had been diverted to the accounts of the accused brokers Hiten Dalal, S K Jhaveri, Pallav Seth, Ketan Parekh and Navinchandra Parekh. The court observed that these stock brokers had entered into a criminal conspiracy with the other accused Sainath Mohan, Ashok Kumar, and B R Acharya.

http://www.indianexpress.com/story/291256.html