Ketan Parekh Again? SEBI Unearths Mega Scam; Reveals How Fraudsters Made Rs 65.77 Crore

Ketan Parekh, who was prohibited from dealing in the securities and debarred from associating with the securities market for a period of 14 years has been allegedly at the epicentre of yet another fraudulent scheme. According to a detailed order and show-cause notice issued by the Securities And Exchange Board of India ( SEBI ), Parekh and Rohit Salgaonkar, along with other entities have been served a notice amounting to a whopping Rs 65.77 Crore.

In the order, SEBI outlined the mega scheme that Parekh and Salgaonkar ran through certain brokerages. According to the order, Parekh allegedly obtained NPI from Rohit Salgaocar and orchestrated the whole scheme to communicate trading instructions based on NPI to other noticees.

Ketan Parekh Again? SEBI Unearths Mega Scam - Modus Operandi 

Based on prima facie evidence collected via call transcripts, WhatsApp chats and other electronic means, SEBI said that Parekh and the group operated in the following manner.

Prior to execution of suspicious trades, (Frontrunners) FRs were receiving trade instructions through WhatsApp chats or calls from a person whose contact number(s) was saved in the devices as Jack/Jack New/Jack Latest New/Boss, etc.

Upon analysis of these contact numbers, it was found that these numbers belonged to Ketan Parekh who was receiving NPI from one, Rohit Salgaocar.

After receiving specific and timely instructions, directly or indirectly, from Ketan Parekh, the FRs used to execute orders and made unjust profits.

The investigation further revealed that the Big Client used to place orders containing the scrip name, buy/sell quantity and buy/sell price through their
order messaging system called FIX.

"For orders routed through Motilal and Nuvama, traders of Nuvama and Motilal used to execute such orders. However, the instructions regarding execution of these orders such as details of the scrip, time quantity and price of the order, were dictated by Rohit Salgaocar," SEBI said.

It was found that SCPL, the company owned by Rohit Salgaocar, had entered into a referral agreement with Nuvama and Motilal for revenue sharing of the
brokerage earned on trades of the Big Client referred by SCPL.

From the backup of the mobile devices found and seized during the aforementioned search and seizure operations and the subsequent statement
recordings of various entities, certain contact details of Ketan Parekh were gathered.

Jack, John, Bhai: What fraudsters referred to Ketan Parekh as

It is noted that in none of the mobile phones, the contact numbers were saved in the name of Ketan Parekh and instead, various pseudo names such as, “Jack”, “John”, “Boss”, “Bhai”, “Wellwisher”, etc were used to save these numbers.

According to the notice, Rohit Salgaocar also earned a referral fee/commission of Rs 8.06 crore and Rs 19,00,44,520 (around INR 19 crore) from Motilal and Nuvama, respectively. "Thus, the total unlawful gain made by Rohit Salgaocar is INR 27.07 crore which was only in respect of the trades of the Big Client referred by SCPL/Rohit Salgaocar. Thus, prima facie, noticees made cumulative unlawful gains amounting to approximately INR 65.77 crores (INR 38.70 crores by FRs + INR 27.07 crore by Rohit Salgaocar)," SEBI said.