SEBI opposes Ketan Parekh plea to travel abroad: Misused permission to engage in illegal trade, motive to settle abroad

In its response filed earlier this month, SEBI has opposed his plea, citing an ex parte interim order passed by a whole-time member of the regulatory body in January this year, when it again debarred Parekh, along with two others, for alleged front-running. The order had said that Parekh was able to communicate time-sensitive non-public information available with Singapore-based Rohit Salgaocar within minutes to the frontrunners, to make illegal profits.

Special Judge R M Jadhav is likely to pass an order on Parekh’s plea on Tuesday.

“The applicant (Parekh) has a history of misusing limited foreign travel permissions. While earlier permissions were sought on compassionate grounds, the investigation has shown that during the same period he was actively engaged in orchestrating fraudulent trades through WhatsApp Groups like ‘Jack-ST’ and ‘Jack-Saro’. This pattern shows that travel applications are used as a cloak to disguise ongoing illegal activity,” SEBI has told the special court in its reply to Parekh’s application.

“…Ketan Parekh and his related entities have filed the present application to travel aboard not only with sinister motive to avoid the surveillance of respondent and to avoid Court proceedings, but also (to) try to settle in a foreign country, from where they can execute their sinister plans which will affect our country’s economy as well as innocent investors at large,” it has said.

“In addition, the ex parte interim order dated January 2, 2025, details the covert modus operandi adopted by the accused, It records that Mr Parekh used multiple SIM cards not in his own name and was saved in the phones of co-conspirators under aliases such as ‘Jack’, ‘Boss’, ‘Bhai’ and ‘Wellwisher’. This deliberate concealment of identity is a clear indicator of his intent to evade detection. If permitted to travel abroad, monitoring his activities or communications would be impossible,” SEBI has said.

Special Public Prosecutor Anubha Rastogi also submitted before the court that the ex parte order has not been challenged by Parekh so far, and a blanket permission to travel for four months would make it difficult to trace his activities.

In January, SEBI had directed that an amount of Rs 65.77 crore gained wrongfully be deposited and Parekh and two other entities be restrained from buying, selling or dealing in securities. SEBI has flagged that Singapore is one of the countries that Parekh wants to travel to, referring to his alleged association with Salgaocar.

The interim order shows that Parekh and Salgaocar maintained communication over WhatsApp and Internet calls, with IP records showing 151 interactions between them, SEBI has said. “This establishes the cross-border nature of the conspiracy. Allowing the applicant to travel abroad at this stage would enable him to seamlessly continue such foreign coordination beyond the reach of Indian regulators and this Honourable court,” it has said.

SEBI has also said the intended travel may lead to exploitation of various technological means, such as encryption and cryptocurrency, to “obscure their transactions and communications”, to minimise the digital footprints of Parekh and his related entities. It has also said that Parekh has not specified the countries in the European Union that he is seeking permission to travel to. “It is submitted that there are countries with which India does not have extradition treaties and therefore the likelihood of being able to secure the presence of the accused becomes slim. Even otherwise, India is facing several issues in bringing back the fugitives of law from such countries,” it has said.

When he was granted bail in 2017, among the conditions set for Parekh was that he would need to seek the court’s permission before leaving the country. In his current application, Parekh has sought permission to travel, in a phased manner, from October 4, 2025 to February 3, 2026. His lawyers submitted that permission was being taken altogether to avoid repeated pleas before the court.

During the hearing on Friday, Parekh’s lawyers submitted that in the past, he was granted permission to travel abroad by various courts. The Supreme Court allowed him to travel to the UK for his daughter’s medical treatment in 2021, as did the special court in 2022. In December 2023, he was also allowed to travel to the UK, Dubai, Singapore, EU and the US.

A chartered accountant by profession, Parekh became hyperactive in the stock markets between 1999-2001, rigging up the shares of information, communication and entertainment (ICE) companies using circular trading, Gujarat-based Madhavpura Mercantile Cooperative Bank, and the Kolkata stock exchange.

Parekh, who was mentored by Harshad Mehta, the kingpin of the 1991 stock market scam, led the bull rally in 1999-2000 which coincided with the global dotcom boom and bust. Other investors and traders followed Parekh’s moves in rigging up ten ICE companies, which were then known as K-10 stocks. Promoters of some companies even funded Parekh to boost their shares.

The scam was unravelled in the wake of a payment crisis at the Kolkata stock exchange. Stock market indices tanked and the collapse was further catalysed by the bursting of the global dotcom bubble. The scam eventually led to the collapse of UTI and tightening of norms by SEBI.

Parekh was named in over two dozen cases under the Securities and Exchange Board of India (SEBI) Act for stock exchange violations, including trading violations and non-payment of penalty. SEBI banned him from the market for 14 years in 2003. A Special CBI court also convicted him and sentenced him to two years imprisonment in 2014.

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