Ketan Parekh Scam and his K-10 Stocks Explained in Detail

The world of trading is full of risk, and for many people, it’s not a suitable career choice. However, for Ketan, it was exactly the opposite. He started his career in the late 1980s at Narbheram Harakchand Securities (NH Securities), a reputed institutional brokerage firm established by his grandfather.

In the 90s, he joined GrowMore investment firm where he was both an accountant and a stockbroker. This meant that he could help clients invest in various stocks and provide them with financial advice. It was during this time that Parekh became involved in some of the scams. However, the fact that he was able to provide advice to his clients means that he was not directly involved in any of the illegal activities.

Being meticulous in approach and hardworking by nature, Ketan was soon able to carve a niche for himself in the world of Finance. With a photographic memory and an interest in how the financial sector works, Ketan quickly mastered the art of trading.

While Ketan did not initially start his career in the field of trading, he soon realized that he had a knack for it. He had put significant time into researching the companies and their potential in these companies. This allowed him to make intelligent investment decisions and ride out the stock prices during the boom years.

List of K-10 Shares

Parekh was a big fan of K-10 stocks. He believed these companies were undervalued and suggested to his clients to buy them.

Parekh’s pick for the year was Pentamedia Graphics (PGCL). He recommended this company to his clients as it was trading at a bargain price of Rs 26 per share. PGCL went on to become one of Parekh’s biggest successes story.

PGCL is now one of India’s leading graphics solutions providers. It has a presence in North America and Europe and provides digital printing, visual communication, and software solutions.

Parekh’s other picks from the K-10 stock market included:-

  1. HFCL (a healthcare solutions provider)
  2. GTL (a technology services company)
  3. Silverline Technologies (a provider of solutions in the manufacturing sector)
  4. Ranbaxy (an Indian drug manufacturer)
  5. Zee Telefilms (an Indian television network)
  6. Global Trust Bank (a financial services company)
  7. DSQ Software (a CRM software provider)
  8. Aftek Infosys (an outsourcing firm)
  9. SSI (a software services provider)

Ketan was believed to support the Information, Communication, and Entertainment (ICE) industry. This was nothing out of the ordinary, considering that the late 1990s and early 2000s were the years of the IT boom, and these stocks were increasing by leaps and bounds worldwide. As a result, the stocks Ketan Parekh selected rose due to their fundamentals. As a result, his significant 200% increase in shares was not as remarkable and did not garner much notice.

The Infractions:-

The issue with Ketan Parekh’s transactions was twofold:-

First, he accepted money from the promoters of several firms to raise their share prices. This is considered insider trading and was enough to jeopardize Ketan Parekh severely. To add insult to injury, Ketan Parekh had also stolen substantial sums of money from the Madhavpura Mercantile Commercial Bank (MMCB).

He was suspected of bribing bank officials to convince them to lend against shares to a higher degree than authorized by law. As it offered credit to Ketan Parekh, the bank first exceeded its authorized limitations for lending against market instruments. The bank then began to provide unsecured loans to him. The loans would be sanctioned initially, with the collateral collected a few days later, leaving the loans unsecured for the time being.

The Fallout:-

Ketan Parekh also traded most of his stocks on the Calcutta stock exchange (CSE). The lack of restriction in this deal gave Mr. Parekh additional leeway. He did not trade on his account but authorized other brokers to hold shares on his behalf and paid them a commission for doing so while covering any losses they could have had on the transaction.

However, Ketan Parekh found himself out of cash as a bear market began to pound the K-10 stocks. Mr. Parekh was also unable to obtain credit from the MMCB bank. As a result, the brokers holding stocks on his behalf on the Calcutta Stock Exchange were obliged to liquidate as well, resulting in a catastrophic market sell-off. Approximately Rs 2000 crores ($4 billion) was lost by investors.

Ketan Parekh has been falsely accused of being a scammer by the media, and his reputation has been ruined. There are many reasons why this false accusation has arisen, but the main reason is that Ketan Parekh is an influential figure in the Indian Stock Market. He has a lot of power and influence, which makes him vulnerable to scammers who want to take advantage of this.

Ketan readily admitted his failures and compensated all of his lenders. For over the last 20 years, Ketan has been doing the right thing because he trusts the Indian judiciary. Ketan’s reputation has been wounded, yet only a few know the truth about the things he did.

To the current day, many people remember him only as a convicted investor involved in multiple scams. Only a few close ones know how he returned most of the borrowed money. Some transactions are still being examined and completed.

Ketan has never come out to explain his side of the story, which has led to several incorrect remarks and assumptions.

Now it’s high time for the rest of the world to know him as a person and an expert trader and investor.

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