Ketan plea to try case in Mumbai rejected

By Our Special Correspondent

AHMEDABAD, AUG. 11. The stock broker, Mr. Ketan Parekh, who was arrested in Mumbai on Friday in connection with the Madhavpura Mercantile Co-operative Bank (MMCB) case, was remanded to seven days' CBI custody by a court here today.

The court rejected his plea for trying the case in Mumbai. Mr. Parekh, who was brought here this morning, was later taken back to Mumbai by the CBI for further questioning.

The collapse of the multi-state MMCB with its headquarters in Ahmedabad, which had a deposit of over Rs. 1,100 crores when the bank was closed in March, was allegedly due to the fraud committed by the companies held by Mr. Ketan Parekh. According to a complaint lodged by the MMCB, 19 companies in which Mr. Parekh had some stakes, including 10 owned by him, defrauded the MMCB of over Rs. 800 crores in collusion with the then bank officials. The Gujarat Chief Minister, Mr. Keshubhai Patel, had made the MMCB revival a prestige issue. He was given a warm reception at the Ahmedabad airport on June 21 after he returned from Delhi where the revival package was claimed to have been given the final shape by the Union Finance Minister, Mr. Yashwant Sinha, in the presence of the Home Minister, Mr. L.K. Advani, but since then nothing has been done.

Despite meetings between the State officials and the Centre, no progress was made on issuing the notification. It is learnt that the central sector deposits' insurance corporation, which had promised to pay Rs. 464 crores to the MMCB to facilitate its revival, had pointed out some legal hitches in depositing the money with the collapsed bank.

The urban co-operative banks, which collectively agreed to keep Rs. 600 crores as deposit with the bank for three years at a concessional rate of interest of 7.5 per cent, said they would advance the money only after receiving default guarantee from the Centre and the State Governments.

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