The Ketan Parekh investigation trundles forward

The discredited stock trader had been granted bail on the condition that he would repay the money owed to the bank in monthly instalments. It may be recalled that Ketan Parekh had siphoned off over Rs 880 crore from the bank, leading to its collapse.

While Parekh has taken full advantage of the monster bull run in the last three years to accelerate his repayment, the investigation agencies are pretending that he is bringing back money he had salted away in overseas accounts.

What is surprising is the cooperation of the Income Tax (IT) Department in facilitating these repayments. It may be recalled, that in 1992, the IT Department has claimed tax dues running into thousands of crore rupees from Harshad Mehta, his brother Ashwin, Bhupen Dalal and others. This had prevented any settlement or repayment because IT staked first right to all recoveries. This time, however, the IT has not made such a claim. A top IT official told this writer that "it was decided that he must be allowed to repay dues to Madhavpura since it involves payments to small depositors". He would not say who had made this decision.

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...