Parekh sentenced to 3 years in prison
A special court on Tuesday awarded a three-year prison term to stockbroker Ketan Parekh for non-payment of dues to the Securities and Exchange Board of India (Sebi). The court directed Parekh to pay a fine of ~500,000, part of which will be paid to Sebi.
The case relates to acquisition of shares of Shonkh Technologies by Panther Fincap beyond permissible limits without making disclosures as part of Sebi regulations. Parekh was the director of Panther Fincap and in charge of the business.
In 2003, the market regulator had imposed a penalty of ~650,000 on Panther Fincap, which then moved the Securities Appellate Tribunal (SAT) against the order. The SAT had dismissed the company’s plea in 2007. The tribunal had directed the company to pay the penalty within 45 days of the order.
Panther Fincap had approached Sebi seeking to deposit part payment of the penalty in instalments, which the regulator did not allow as it was not in accordance with its rules.
Due to non-payment of the penalty, the criminal proceedings before the special Sebi court were initiated.
In November, Parekh was arrested after a non-bailable warrant was issued against him for not appearing in court. He continued to remain in judicial custody.
On Tuesday, the Sebi counsel sought the maximum punishment of 10 years and a fine of ~250 million. Parekh sought leniency.
The special court then sentenced him to three years in prison. Parekh can appeal before the Bombay High Court for relief.