Mumbai: Several banks and brokerages are under the scanner in regard to an alleged swindle at Pyramid Saimira Theatre Ltd (PSTL), government officials said.
The firm, which suffered a loss of Rs100 crore over the past year, has been embroiled in controversies related to income tax. A large investor also sold shares, exiting the company under questionable circumstances.
The Reserve Bank of India has begun a probe into the irregularities along with stock market regulator Securities and Exchange Board of India (Sebi), which is probing the role of brokerages, the officials said, requesting anonymity. Laxity of know-your-customer norms by banks and brokerages is being probed, they said.
In April, Sebi barred the promoter and then chairman of the firm that runs a chain of cinema halls, P.S. Saminathan, and four others from the securities market for forgery, disseminating false information and manipulating the share price of the company.
Those barred include Nirmal N. Kotecha, listed on the Bombay Stock Exchange as a promoter of the company.
Besides these, 16 individuals and 230 other entities were banned from participating in any form of share transactions till further notice, for their involvement in the scam, which caused huge fluctuations in Pyramid Saimira’s share price in December last year.
These 230 entities were alleged fronts for Kotecha and there are charges of alleged money laundering by these entities.
It is alleged that money was routed among these entities and there were large cash withdrawals.