The Central Bureau of Investigation has filed three charge-sheets against stock broker Ketan Parekh and six others, including former top executives of Global Trust Bank, for allegedly entering into a criminal conspiracy and swindling public money to the tune of Rs 250 crore (Rs 2.50 billion).
The CBI filed the charge sheets against Parekh, Darmesh Doshi, Jatin S, Kirti Parekh, Kartik Parekh (all directors of companies held by Ketan) and chairman of Singapore-based Brentfield Holdings T L Chandran.
Ramesh Gelli, the former chairman and managing director of GTB, which has now merged with Oriental Bank of Commerce, and its executive director Sridhar Subasiri were also named in the charge sheet filed under various sections of Indian Penal Code and Prevention of Corruption Act at a Mumbai court, CBI sources said on Monday.
The two together held 40 per cent of total shares of GTB.
According to the CBI charge sheet, GTB bank officials allegedly entered into a conspiracy with Parekh and his associates by giving him temporary overdraft facility worth Rs 250 crore without either seeking an application or collaterals or ascertaining the genuineness of "pay-in" requirements.
Under the "pay-in" requirements, banks give overdraft facility to registered brokers whose money is expected to come from customers who have been sold shares.
Part of these funds were used by Gelli and Subasiri to increase their stake in GTB by purchasing shares from foreign promoters. The CBI alleged that the money was also used for manipulation of the stock market by Parekh.
The second charge sheet pertains to the violation of Reserve Bank of India's "Group Exposure norm", whereby no individual or a company is given more than 50 per cent of bank's capital for overdraft facility.