Global Trust Bank may write off Rs 180 crore lent to Ketan Parekh

Ujjal K Basu Roy

Mumbai, Sept 17: Global Trust Bank (GTB) is contemplating writing off the Rs 180 crore owed to it by Ketan Parekh by way of both loans and advances against shares.

Said a GTB official: “The bank may write off the entire amount of Rs 180 crore which is outstanding from Ketan Parekh. It is one of the options we have and a decision will have to be taken”, adding: “Even if we write it off, nothing stops us from going ahead and trying to recover the outstanding amount”.

It may be mentioned here that write-offs gives a bank tax-benefits unlike provisioning.

GTB has already provided for some of the exposure for the fiscal year ended March 31, 2001 and for the first quarter ended June 30, 2001. The bank had made an extra provision of Rs 50 crore for end-March and Rs 20 crore for the first quarter. Some more on the outstanding amount may be provided for in the second quarter ending September 30.

The bank has decided to invoke the pledge on securities against which funds were extended to firms which had links with Ketan Parekh. The bank recently acquired five per cent in DSQ Industries, Mascon Global and Emco.

The firms which had dealings with GTB are Triumph International, Triumph Securities, Classic Stockbrokers, NH Securities, Panther Fincap, Panther Securities and Sai Mangal. Besides shares of DSQ, Emco, Mascon and Triumph International, GTB currently holds shares of DSQ Software and Global Tele as well.

Said the GTB official: “One option now is to sell it, but it is not easy. The prices are low and if we do sell, the prices will crash further. So for the moment, there is no question of selling them”.

The official said that GTB had decided to invoke the pledge on all the securities and take them on its books inspite of some of these scrips dropping in value and being illiquid in nature because to it wants to avoid possible complications if tax authorities moved against Parekh and eventually attach these securities. Said a bank official: “We have transfered the holdings in our name and are holding it. If he pays back, which seems unlikely, he can take them back.”

On the BSE, the Emco scrip on Monday closed at Rs 17.95, against a high of Rs 86 on September 10, 2000, while Mascon closed at Rs 18 on Monday, against a high of Rs 575 last December.

GTB had earlier notified the Bombay Stock Exchange that it had acquired over 13 per cent in Triumph International in which Ami Parekh (wife of Kartik Parekh) and Mamta Parekh (wife of Ketan Parekh) hold 15.84 per cent of the equity. Ketan Parekh does not hold any share in the company.