BoI may alter KP's consent terms

The board of Bank of India (BoI) is to meet soon to consider modifications in the consent terms reached by Ketan Parekh with the bank.

As per the consent terms, the then big bull has agreed to pay a sum of Rs 112 crore in 12 equated quarterly installments by September 30, 2007.

Parekh has to pay the bank interest at prime lending rate from the date of purchase of the pay-orders by BoI, that is March 2001, till the clearance of all dues.

Parekh has also sought re-scheduling of the initial Rs 10 crore to be paid to the bank. Parekh also expects that no costs should be imposed on him as a result of the litigation between him and the bank in the debts recovery tribunal.

Further, Parekh wants BoI to despatch letters at regular intervals to the Madhavpura Mercantile Co-operative Bank confirming the receipt of payments.

Ketan Parekh's account had become sticky in March 2001, when BoI discounted pay-orders aggregating Rs 137 crore. The pay-orders were issued by the Ahmedabad-based Madhavpura Mercantile Co-operative bank.

Parekh was to pay Rs five crore by October 2002 and a similar amount by March 31, 2003.

Now, he has sought extension of time in this regard. The former stock broker has indicated that he will pay Rs five crore by March 31, 2004 and another Rs five crore before December-end 2004.

The outstanding against Parekh's name in BoI's books is Rs 121.61 crore.

Out of the original outstanding amount of Rs 137 crore, the bank has actually recovered Rs 8.05 crore from Parekh, another Rs 13.55 crore is lying with the Prothonotary & Senior Master of the Bombay High Court.

Though Parekh wanted the bank to invoke the default clause only if three installments became overdue, the bank has made it clear that it will agree only two installments.

If Parekh falls foul of the two installment clause, he will have to pay-up Rs 144.53 crore (the amount for which BoI had filed a suit on June 28, 2001) plus accrued interest of around Rs 58 crore.