New Delhi: Ketan Parekh, prime accused in the last year's stock scam, operated through a large number of entities which facilitated hiding of nexus between corporate sources of fund flow and ultimate use in stock market, the Joint Parliamentary Committee (JPC) on stock scam has observed.

"He (Parekh) used a networking of various FII sub-accounts, OCBs, institutions and mutual funds for large transactions thereby creating an impression of market interest in certain select scrips," the JPC inquiring into the stock scam and temporary freeze on UTI's flagship scheme US-64 said in its draft report which is about to be finalised.

"To begin with, he normally identified companies with relatively low floating stocks, acquired substantial holdings in these companies either directly or through associates including FII sub-account, OCBs etc," the report said.

"Various layers were created (by Parekh) so that it becomes difficult to link the source of fund with the actual user of fund," the report said adding it was observed that funds were received by certain entities from banks as loan and overdrafts that were diverted to other entities for acquiring shares and meeting other obligations."

It also appeared that the transactions for purchase and sale of shares were done in the name of large number of entities so that concentration of positions/transactions in a particular scrip would not be detected, the report stated.

PTI