GTB notice to Ketan Parekh over Rs 180cr exposure

Ujjal K Basu Roy

Mumbai, Dec 9: Global Trust Bank (GTB) has issued a notice to Ketan Parekh for recovering the Rs 180 crore that owed to the bank.
“This is not a legal notice, but are sent by the recovery department of the bank. This is part of the initiation of recovery proceedings against Mr Parekh”, sources said.

The bank has been in informal talks with Mr Parekh to recover the money. While GTB has not yet initiated legal proceedings against Mr Parikh, it has not been ruled out completely and could be on the cards in future.

Bankers say that sending a notice to the party from the recovery department is the first stage in the recovery process. If there is no response, then an additional two or three notices are sent.
Negotiations later take place and a bilateral agreement is hammered out.

Earlier, GTB had 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 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.

The bank had not sold these shares since then. The prices are low and on selling, the prices could crash further. So for the moment, the bank is not selling them.

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 Mr Parekh and eventually attach these securities. The holdings had been transferred in GTB’s name and the bank is holding it. If Mr Parekh pays back, which seems unlikely, he can take them back.

Recently, the board of directors of GTB decided to set up an interim committee of the board comprising four board members till the time a successor is found for its outgoing CMD, RS Hugar. After a GTB board meeting, the bank said that four members on the committee will be Dr Sailendra Narain, former MD of the SIDBI; Dr Kotiah, former chief of the National Bank for Agriculture and Rural Development; VM Agadi, former chief of Parke Davis; and Ravi Appaswamy, hotelier and industrialist from Chennai.