Summary of this article
Sebi has objected to former stockbroker Ketan Parekh's plea to travel abroad, citing various concerns and past incidences in which Parekh used permission to travel abroad for front-running.
Market watchdog the Securities and Exchange Board of India (Sebi) objected to former stockbroker Ketan Parekh's application to travel abroad in the upcoming months. The market regulator cited former instances in which Parekh used foreign travel permissions to undertake fraudulent trades, according to a report by the Indian Express.
Parekh, along with 20 other individuals and entities, has been debarred from the securities market for involvement in a front-running operation following an investigation that was conducted between January 1, 2021, and June 20, 2023. Prior to the recent probe, Parekh was barred from the stock market for 14 years for his role in the 2000-2001 scam.
The former stockbroker faces criminal charges before a special court in Mumbai. Parekh appealed to the court to allow him to travel to several countries, including the United Kingdom, United Arab Emirates, Singapore, Thailand, Sri Lanka, Georgia, South Africa and regions within the European Union. Parekh cited reasons such as a family vacation, attendance at two weddings and his elder daughter's health condition for travelling to these locations.
The market regulator has opposed the plea by stating past instances in which Parekh used foreign visits to undertake fraudulent trades. Sebi has alleged in its objection that the former stockbroker has a "sinister motive" to curb surveillance, circumvent court proceedings and "settle in a foreign country".
The market watchdog objected to the plea by citing an interim order passed in January related to Parekh's involvement in a recent front-running scam. As a part of the scam, Parekh communicated time-sensitive non-public information related to certain securities to frontrunners, to make illegal profits.
"…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," Sebi said.
"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 told the Mumbai court.
The market watchdog also said that Parekh used multiple SIM cards in his recent front-running operation. Thus, permitting the former stockbroker to travel abroad would make it impossible for Sebi to track him and his activities.
"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 said.
Highlighting other difficulties involved with allowing Parekh to travel, the market regulator stated that there are several countries with which India does not have extradition treaties. Sebi added that it wishes to avoid a long-drawn legal procedure for extradition.
"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," Sebi said.
The market regulator mentioned that Parekh has mentioned Singapore in the list of the countries. Notably, Parekh's co-accused in his recent front-running operation, Rohit Salgaocar is also based in Singapore. The Sebi cited other objections to the plea such as the exploitation of certain technologies such as encryption and cryptocurrency to obscure transactions and cover up Parekh's digital footprint.
