The Ketan Parekh group has approached the Bombay high court against the Company Law Board's order allowing investigations against the 16 companies owned and controlled by the erstwhile broker for defrauding creditors and other stakeholders in the 2001 stock market scam.
The petitioners have said that the CLB did not have the power to order investigations. They have said that the CLB can issue orders in such cases only if the company is currently doing business.
The case against 16 companies which are under the Bombay high court's jurisdiction are slated to come up for hearing shortly. The case dealing with Classic Infin is expected to be heard by the Calcutta high court.
In their appeal before the high court, the counsel for petitioners have stated that section 237 (b) of the Companies Act clearly talks about a case where the business of the company "is being conducted" with intend to defraud its creditors or any other person.
"As they have been barred by the Securities and Exchange board of India to trade in the markets they have appealed against the order on technical grounds," said a government representative.
Earlier, the Parekh entities had asked the CLB to defer the investigations on the ground that they were already being investigated by Sebi, income tax department and CBI.
