Stock broker Ketan Parekh gets 3-year jail for non-payment of dues to Sebi

A special court on Tuesday awarded three years imprisonment to stock broker Ketan Parekh for non-payment of dues to market regulator Sebi. The court also directed Parekh to pay Rs 500,000 as fine, part of which will have to be paid to Sebi.

The case pertains to acquisition of shares by Panther Fincap of Shonkh Technologies beyond permissible limits without making disclosures under the Sebi regulations. Parekh was the director of Panther Fincap and in charge of the business.

In 2003, Sebi had imposed a penalty of Rs 650,000 on Panther Fincap, which then moved the Securities Appellate Tribunal (SAT) against the order. In 2007, SAT had dismissed Panther’s plea.

The tribunal had directed the company to pay the penalty within 45 days of the order.

Panther Fincap had approached Sebi seeking to deposit part payment of the penalty in installments, which was not allowed by the Sebi as it was not in accordance with it rules.

Due to the non-payment of the penalty, the criminal proceedings before the special Sebi court were initiated.

In November, Parekh was arrested after a non-bailable warrant was issued against him for not appearing in court in the trial. He continued to remain in judicial custody.

On Tuesday, the Sebi counsel sought the maximum punishment of 10 years and a fine of Rs 25 crore Parekh sought leniency.

The special court sentenced then sentenced three years in prison.

Parekh, who is already under judicial custody, can appeal before the Bombay High Court for relief.