Joint Parliamentary Committee formed by the government to probe the facts of the Ketan Parekh Scam submitted their report (JPC Report).
According to the JPC report, the phenomenal rise of the securities market and the enormous trading volumes in certain specific scrips referred to as “K-10 stocks” (Aftek Infosys, DSQ Software, HFCL, Global Tele-system, Pentamedia Graphics Ltd., Ranbaxy Laboratories, Silverline Technologies, Satyam Computers Ltd., SSI Ltd. and Zee Telefilm Ltd.) was a phenomenon peculiar to the Indian securities market. Occasionally, almost sixty percent of the entire trading in stock exchanges related to those specific scrips.
There was a nexus between Ketan Parekh, banks and the corporate houses,” said the report, which was presented in the Lok Sabha by JPC chairman Prakash Mani Tripathi.
The committee recommended that this nexus should be further investigated by either Securities and Exchange Board of India or by the Department of Company Affairs while observing that the scam was the result of manipulation of the capital market to benefit market operators, brokers, corporate entities and their promoters and management.
The report further sited that 45 out of 58 prosecutions relate to diversion of funds under various Sections viz. 62/63, 77, 295, 370, 372 and 372A. The above 58 prosecutions are against thirty companies including Cyberspace Ltd. for violations u/s 62/63 and 209A, DSQ Software Ltd. u/s 372A and 295, Adani Exports Ltd. u/s 295 and 372A, Amara Raja Batteries u/s 295, Pentamedia Graphics Ltd. u/s 628/211, Silverline Industries Ltd. u/s 370 and SSI Limited u/s 58A
Complete report on Stock Market Scam can be downloaded here
[pdf_attachment file=”1″ name=”JPC report on Ketan Parekh Scam 2002″]