Parekh remanded to CBI custody

By Our Special Correspondent

MUMBAI, MARCH 31. Mr. Ketan Parekh, leading stockbroker, and Mr. Jagdish Pandya, manager of the Madhavpura Mercantile Cooperative Bank (MMCB), were today remanded to the custody of the Central Bureau of Investigation till April 9 for their alleged involvement in defrauding the Bank of India to the tune of Rs. 137 crores in the pay-order scam.

The order was passed by Mr. A. R. Joshi, judge of designated the CBI court here. While Mr. Parekh was arrested yesterday, the CBI took Mr. Pandya into custody today for collusion with Mr. Parekh in the same case. The judge, granting the CBI custody of Mr. Parekh, noted the CBI submission that in cases of economic offences too custodial interrogation was warranted to unearth the ramifications although prima facie, the transaction between the parties may appear to be of a civil nature.

Mr. P. S. Raghuvanshi, special public prosecutor appearing for the CBI, submitted that the Mandvi branch of the MMCB issued 13 pay-orders in favour of companies of Mr. Parekh - Classic Credit Ltd, Panther Investrade Ltd and Panther Fincap & Management Services Ltd. The pay-orders were presented to the Stock Exchange branch of the Bank of India, and the proceeds immediately credited to the accounts of the three companies from where they were siphoned off.

When the Bank of India submitted the pay-orders to RBI, the latter returned them unpaid as the MMCB did not have sufficient funds, and in fact did not participate in clearing at all on March 9. The CBI, on the basis of a complaint made on March 13 by the BoI Chief Vigilance officer, Mr. S. K. Goel, registered the case against Mr. Parekh under several sections of the Indian Penal Code.

In its remand application, the CBI said custodial interrogation was necessary to ascertain the purpose of siphoning off Rs. 137 crores from the BoI; the ultimate destination of the funds; under whose instructions the MMCB issued the pay-orders; the identity of the BoI officials who might have abetted the crime; and to unearth any larger conspiracy.

Defence counsel, Mr. Shirish Gupte, pleaded that the transaction ``appears nothing less than a banking transaction of a discounting deal. Banks now and then do take risks when they discount bills.'' This is not the first time the BoI or for that matter, any bank, discounted bills without risk involved, he said. Mr. Parekh had already paid the BoI Rs. 7 crores, and that indicated his willingness to pay, said Mr. Gupte. Even if he wanted to, Mr. Parekh would have been unable to satisfy the bank's liability in view of the recent Income Tax raids on him and the seizure of his documents.

As Mr. Parekh's passport had been seized and he had indicated willingness to pay up, custodial interrogation would be unnecessary, counsel said.

The accused in the case are Mr. Ketan Parekh, Mr. Kirtikumar Parekh, Director of Panther Investrade Ltd; Mr. Kartik Parekh, also Director, Mr. Navinchandra Parekh, Fortune company, Classic Credit Ltd, Panther Investrade Ltd., Panther FinCap & Management Services Ltd, unknown officials of the Bank of India and of MMCB, unknown officials of Ketan Parekh companies, and ``unknown others''.

Send this article to Friends by E-Mail

Section  : National
Next     : Cong. for JPC probe into pay-order scam