Bank Of India Directed To Sell Ketans Shares In Balaji Tele

Bank of India is inching closer to recovering part of its Rs 130 crore dues in default by stock broker Ketan Parekh. The Mumbai Debt Recovery Tribunal (DRT) recently passed an order allowing the bank to sell its holdings of shares in Balaji Telefilms, held by Ketan Parekh, to recover the dues that he owes Bank of India.

Parekh held a claim to 4,64,500 shares of Balaji Telefilms which amount to a 4.5 stake in the company before it went in for an initial public offering (IPO). The shares were never delivered by the company. In the wake of the Madhavpura Coop scam, the bank moved the DRT seeking a restraint on Balaji Telefilms parting with the shares to Ketan Parekh.

The price of the Balaji Telefilms share today closed at Rs 528.20 on the Bombay Stock Exchange. The sale of 4,64,500 Balaji Telefilms will fetch the bank approximately Rs 24.53 crore.

The income tax department too wanted to claim these shares. According to banking sources, DRT has directed the setting up of a three-member committee comprising BoI, the IT department and Ketan Parekh to oversee the sale.

According to a senior Balaji Telefilms official, Parekh held these shares much before the IPO and the shares were not delivered because of the restrictions put by the DRT. With regard to the latest order issued by the DRT allowing the sale of Balaji shares, he said that company officials had not yet received any information or letter on this issue.

On an earlier occasion too, Bank of India had shared with the IT department the proceeds of an attachment of another Ketan Parkeh deal. The broker had paid an advance to ICICI (the former avatar of ICICI Bank) to buy its old headquarters in south Mumbai but the deal was never consummated. Both the bank and the IT department independently staked a claim to the advance Parekh paid ICICI. Following a DRT order, the Bank of India got Rs 4.4 crore from ICICI while the IT department got over Rs 3 crore.

If Bank of India realises the current price of Balaji Telefilms shares, its sticky exposure to Parekh will come down to around Rs 100 crore.

Meanwhile, the government has asked the Central Bureau of Investigation (CBI) to take a look the Bank of India's proposed out of court settlement with the broker. The bank sent the proposal seeking the government's approval a few months back.