Sucheta Dalal :CBI freezes 2001 Stock Broker Scam accused Dharmesh Doshi's bank account In London
Sucheta Dalal

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CBI freezes 2001 Stock Broker Scam accused Dharmesh Doshi's bank account In London  

April 14, 2007

 In a significant development, the Central Bureau of Investigation froze a bank account containing approximately U.K. pounds 6 million at the credit Suisse Bank, U.K. in which stock broker Dharmesh Doshi, an associate of Ketan Parekh, has controlling interest. The investigating agency has been making all efforts to secure the presence of Dharmesh Doshi to face trial at an Ahmedabad court in connection with siphoning out Rs.780 crore from the Madhvapura Mercantile Co-op.Bank (MMCB) in connivance with top management of the bank. An Interpol Red Corner Notice is pending against Doshi.

          Efforts made through Interpol have resulted in the identification of the bank account in the name of M/s Elliot Group Holdings Ltd. in which Doshi has controlling interest. On receiving information from the London Metropolitan Police through Interpol, London, CBI got a Letter Rogatory (LR) issued for freezing the account and on the basis of the request, the Judicial authority of U.K. has frozen the account. The freezing of the bank account in the U.K. marks a significant progress in the investigation of Stock Market Scam of 2001 and has made CBI hopeful of reaching a final destination where the funds of MMCB reached. In the process of getting the restraint orders from the U.K. Courts, CBI received timely help and cooperation from the Ministries of External Affairs, Home Affairs, the British High Commission,New Delhi and the Interpol, London.

          CBI has filed the charge sheet in the Madhavpura Mercantile Co-op. Bank case against Stock Broker, Ketan Parekh, Chairman of MMCB, Rameshchandra Parikh, Managing Director of MMCB, Devendra Pandya and others besides, Dharmesh Joshi. In the Stock Market Scam of 2001, the Ahmedabad based Multi-State Co-op.Bank, the Madhavpura Mercantile Co-op.Bank suffered a massive loss of Rs.1030 crore as the funds of the bank were siphoned out by the accused persons in connivance with the bank’s top management. The trail of siphoned funds of the bank led CBI to certain bank accounts in the U.K. and the consequent action by the CBI. Doshi has been absconding from India and is not available to face trial in the case. He is suspected to be staying in London and active in the financial markets of the U.K.

          Ketan Parekh and Dharmesh Doshi were business associates. Ketan Parekh who fancied the infamous “K-10” Stocks bought the shares of “K-10” Companies, introduced in the Indian Market by some Overseas Corporate Bodies (OCBs). These stocks introduced by OCBs had a dream run in the Market during October 2000 to March 2001, because of the manipulative trade practices carried out by Ketan Parekh and some OCBs, acting in concert. The phenomenal rise of the stocks in the market attracted lakhs of small investors into the stock market but the market crashed on 8th & 9th March, 2001 and the common investors lost thousand of crores of rupees.

          Ketan Parekh who was instrumental in the market run-up through speculative trading in concert with some OCBs, was slowly and steadily drawing the money from MMCB through his loan account, to meet his payment obligations. The money siphoned off by Ketan Parekh from MMCB was Rs.780 crore out of the Rs.1030 crore loss suffered by the bank. Investigations revealed that at the time of the market crash, Ketan Parekh had bought the K-10 shares mostly from these OCBs, the payment for which had come from MMCB. Investigation also revealed that the brokerage firms of Dharmesh Doshi, M/s Triumph International Finance (India) Ltd. (TIFIL) and Triumph Securities Ltd. (TSL) acted as the brokers for the selling entities (OCBs) as well as to the buying entities (Ketan Parekh). During the relevant period, Ketan Parekh and Dharmesh Doshi were the Directors of TIFIL & TSL. The funds of MMCB siphoned off by Ketan Parekh through his loan account were routed through the accounts of TIFIL & TSL with the erstwhile Global Trust Bank (eGTB) to the accounts of OCBs in Mauritus and U.K.

New Delhi,  30.03.2006


-- Sucheta Dalal