Market regulator Securities and Exchange Board of India (Sebi) today said debarred stock broker Ketan Parekh appears to be trading in stocks through certain front entities, and referred the matter to the Enforcement Directorate for further investigation.
"...It appears that he (Ketan Parekh) has conveniently used the connected clients at will as its front entities for executing trades desired by him in the securities market," Sebi said in a order barring 26 entities from the market.
Ketan Parekh and his companies were banned by market regulator Sebi from participating in securities market for masterminding the multi-crore stock scam during 1999-2001.
Sebi in its today's order said these kinds of trades by Ketan Parekh are possible because the "connected clients" can trade without any restraint.
The probe by Sebi found that the flow of funds originating from Parekh, when juxtaposed with securities market transactions of connected clients leads to the possibility that these trades were executed to confuse the funds trail and to integrate the money originating from the banned stock broker into the banking system.
"This needs to be examined by an appropriate agency and therefore Sebi is referring the matter to the Enforcement Directorate," market regulator said.