| Stung by the Company Law Board's (CLB) temporary stay on investigations into 16 Ketan Parekh entities, the government has said the CLB cannot review its own final order. | |
| On Tuesday it filed its reply to CLB's stay. "The reasons cited by the petitioners are frivolous. They have asked for investigations to be deferred because they are currently being investigated by the CBI, income-tax department and the Securities and Exchange Board of India," said public prosecutor Sanjay Agarwal. | |
| "The CLB suo motu granted the temporary stay and now we have filed our reply," he added. Under rules 44 and 46 of companies proceeding, the CLB can, in exceptional cases, review its order but the government is miffed as it does not see this case falling in that category. | |
| The next date of hearing of the case is November 24. | |
| Prior to granting the stay, the CLB had on September 29 ordered investigations into Ketan Parekh entities, including VN Parekh Securities, KNP Securities Ltd, and Classic Credit Ltd, for "defrauding" creditors and other stakeholders. | |
| In its order, the CLB said various creditors and deposit-holders of Madhavpura Co-operative Bank, Global Trust Bank and City Co-operative Bank had lost funds because of their transactions with Parekh's companies. The CLB, therefore, directed investigations under Section 237(b) of the Companies Act, 1956. | |
| " The KP group companies used funds to the tune of Rs 2,218 crore and played with market sentiment. When the market collapsed, these entities could not repay more than Rs 1,274 crore to as many as six corporate groups," the order had said. | |
| The government had asked the Serious Frauds Investigations Office (SFIO) to look into the matter.
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