Yet, IT officials made little attempt to track the cash deposits. The moot question is, can Ketan Parekh's repayment in the Madhavpura Bank case, which is in excess of Rs 254 crore have all been through small cash deposits? It is hard to believe. Clearly, tax officials are dragging their feet over Ketan Parekh's source of funds. Also, why would they make the obviously wrong assumption that he is bringing money from abroad, when the media has repeatedly reported his alleged operations in the stock and commodity markets?

Contrast this with the IT demand of over Rs 10,000 crore (a puffed up figure arrived at by compounded interest and penalties) against Harshad Mehta in 1992 and first right over all recoveries. Harshad Mehta, whose assets of Rs 1200 crore were in excess of his liabilities was willing to pay back his creditors but he was not allowed to do so. This time, the IT has made no impossible tax demand.

The unwillingness to investigate him makes a mockery of the Sebi order (since upheld by the Securities Appellate Tribunal) barring Ketan Parekh and eight associates from the capital market for 14 years. The 60 page SAT order said that the action against Parekh was reasonable, given the extent of his market manipulations. It had also criticised the regulator for letting off two foreign brokerage firms with a much lighter sentence.

Other investigation wings of the government are also reporting some progress. We have reliably learnt that the Enforcement Directorate has tracked two individuals — T L. Chandran and Meena Chandran — who acted as fronts for the Mauritius based Overseas Corporate Bodies (OCBs) set up with a $10 capital that were linked to Ketan Parekh in 1999-2000.

... contd.