The rise and fall of Ketan Parekh

The rise and fall of Ketan Parekh
SUCHETA DALAL

MUMBAI, MARCH 12: It was over 15 months ago that Ketan Parekh was reverentially nicknamed the ``One-man Army'' by a section of the business press. Though his influence over the market then rivalled that of one-time Big Bull Harshad Mehta, Parekh himself remained resolutely low profile.

Unlike the ebullience and charm of Harshad Mehta, with whom he is inevitably compared, Parekh was shy and serious. There were other differences too -- there was no flashy car, media hype or flamboyant parties. It was as though Parekh, the youngest of Harshad Mehta's associates in 1992, had learnt a lot from the Big Bull's problems.

After all, one of his closest friends is Ashwin Mehta, Harshad Mehta's low-profile brother. And the fact that he was still to clear himself in the Canbank Mutual Fund case (3 of 1996 of the securities scam) may also have made a difference.

All that changed in January 2000 with his famous Millenium bash. Guests, who comprised the new software czars and biggies of the financial world, were treated to a champagne reception at Taj Mahal Hotel's Sea Lounge restaurant. And then ferried in high-security catamarans across the sea, to Parekh's seaside bungalow at Mandwa, a short ride off South Mumbai's coast.

The Millenium bash was a sort of coming-out party for the reclusive Parekh. Suddenly, he was going the Harshad Mehta way with a vengeance. He made media headlines with regularity, sometimes in tow with personalities like the Australian magnate Kerry Packer, politician Amar Singh or Vinay Maloo of Himachal Futuristic.

The modest car gave way to an extravagant Cadillac and like Harshad Mehta (who was in the process of buying up all the offices at Maker V in Mumbai's business district of Nariman Point), Parekh agreed to pay a hefty premium toto purchase ICICI's former office building for Rs 75 crore.

To the adoring crowd of IT industrialists, whose shares were soaring under the KP influence, was now added the film and TV crowd. Suddenly, the A (Amitabh Bachchan Corporation) to Z (Zee Telefilms) of entertainment was part of the charmed KP circle, not to forget the notorious and appropriately mentioned Tips Cassettes, whose public issue was lead-managed by Parekh's company, Triumph International.

ABCL was snatched back from the clutches of the BIFR and its sundry creditors by Parekh and Amar Singh -- a grateful Big B was soon inaugurating garment shops owned by the bulge-bracket broker's relatives.

The ambitious juggernaut rolled on.

Parekh reportedly went on to buy a stake in Kothari Pioneer Asset Management Company along with friend Vinay Maloo. He also announced a high-profile venture capital company called KVP Ventures along with Maloo and Kerry Packer. Though KVP reportedly stood for Ketan, Vinay and Packer, market wags claimed that it represented Ketan V. Parekh's initials and was entirely his company.

Until a year ago, Parekh had seemed untouchable --- even an Income Tax raid was apparently toned down into a search. But the market remained nervous. Many compared his coming-out bash with a similarly lavish party on April 9, 1992, just before the securities scam blew up, ending Harshad Mehta's famous bull run.

Soon after, the IT mania began to lose steam and sanity started to return around the world. But KP chose to stay with his IT stocks. To the savvy operator, the first sign of Parekh's troubles emerged when he forced a merger of the troubled Channel 9 Network India Pvt. Ltd. with Balaji Telefims, just one day before the listing of the shares on the stock exchange.

The market read trouble. Ever since, it has been a tussle between KP and the bear operators who have hammered his scrips at every opportunity. The double whammy of paying out mark-to-market margins to cover his losses and the increased collateral that he had to provide against his borrowings finally seems to have ended the KP saga.

The intriguing question is: Why did a savvy operator like KP not make a timely exit when the IT story had ended? An old market saying blames it on flash and flamboyance -- ``It creates a sense of invincibility and causes the downfall of the best of punters,'' say seasoned and chastened punters.