Our Markets Bureau

Mumbai, April 6: THOUGH it was a bank holiday on account of Mahavir Jayanti on Friday, the investigating agency in the Rs 137-crore pay-order scam, the Central Bureau of Investigation (CBI), and the Income-Tax (IT) department were working in full swing.

The CBI produced the chairman of Madhavpura Mercantile Cooperative Bank (MMCB), Ramesh Parikh, who was arrested late Thursday night, in the designated court of Judge AR Joshi, who remanded him to CBI custody till April 9 for his alleged role in conniving with leading stockbroker Ketan Parekh and others to defraud Bank of India to the tune of Rs 137 crore in a pay-order scam.

On the other side, officers from the IT department visited the offices of a Bombay Stock Exchange (BSE) broker, Nirmal Bang, and searched for some papers in connection with the earlier raids conducted on the premises of this and other brokers in connection with the bear cartel investigation. The IT department also recorded the statement of the stockbroker and questioned employees in connection with evidence of some companies that the department suspected were bogus.

Sources said the registered office address of these companies were the same as that of Bang’s office. The managing directors in these companies were his (Bang’s) employees. Their statements have also been recorded.

Ketan Parekh, his cousin Kartik Parekh (director of Panther Investrade Ltd) and Jagdish Pandya (manager of Madhavpura Cooperative Bank’s Mandvi branch here) have already been remanded to CBI custody till April 9. On a plea by the defence counsel, the judge allowed medicines and home-cooked food to Parikh, subject to security check by the CBI. He said the accused is a diabetic patient and has undergone bypass surgery recently. The judge also directed the CBI to get the accused medically examined in a hospital if he complained of any health problem and accordingly, the CBI team took him to the state-owned St George Hospital before taking him back to White House, the CBI headquarters.

The defence counsel submitted that the accused had himself surrendered before the CBI and denied that Parikh had evaded arrest. He had gone to Bhavnagar to visit his ailing sister and was not aware about the CBI probe into the alleged scam, he said. CBI prosecutors said Parikh was not at all cooperative and was evading interrogation. They sought his custody till April 12 but, the defence lawyer said he would not object if the accused was remanded till April 9. The CBI said in the remand application that Parikh had been confronted with co-accused Jagdish Pandya and both of them were trying to pass the blame on each other for issuing pay-orders to Bank of India, although there was insufficient money in the account of Ketan Parekh with Madhavpura.

Mr Jagdish Pandya told the CBI that he was pressurised by the chairman of Madhavapura bank, Parekh, to issue pay-orders despite insufficient balance in the accounts of the broker. Parikh, on the other hand, blamed the managing director of the bank, Devendra Pandya, for issuing such instructions to favour the accused, Ketan Parekh. Devendra Pandya is at large and the CBI is looking out for him, the remand application said.