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Sebi bans 5 linked to Pyramid Saimira

Sebi bans 5 linked to Pyramid Saimira
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First Published: Thu, Jun 25 2009. 11 00 PM IST
Updated: Thu, Jun 25 2009. 11 00 PM IST
Mumbai: Capital Markets regulator Securities and Exchange Board of India, or Sebi, on Thursday banned five persons connected with Pyramid Saimira Theatre Ltd (PTSL) from accessing the securities markets for three years. The ban is on account of illegally cornering shares reserved for the employees of PTSL during its public issue.
In its investigation report, Sebi said that 13 persons had applied for shares under the employee category. Out of this, six people applied for 6,540 shares while seven others applied for 4,26,060 shares According to Sebi’s report these seven persons “obtained 98.5% of the shares allotted under this category, received the shares in the demat accounts with the same depository participant, sold the shares through the same broker soon after listing and made a total unlawful gain of Rs.2,31,94,612.”
“The investigations has also revealed that these persons in collusion with PSTL, donned the cloak of ‘employee’ on the eve of the public issue for 4 to 6 months with the sole purpose of receiving shares under the employee category,” Sebi said in its report.
The regulator has ordered these persons to disgorge the amount along with an interest of 20% from the date of sale of PSTL shares.
In April, Sebi had issued an interim order barring PSTL promoters Nirmal N. Kotecha and P.S. Saminathan for forging a Sebi document in December that purportedly allowed the firm to have an open offer.
The order in the PSTL case relates to media reports at the time that Sebi had directed Saminathan to make an open offer for an additional 20% stake at a price not less than Rs250.
Later, the market regulator clarified that no such order or letter had been issued by Sebi to Saminathan.
The regulator conducted a probe into the matter, which prima facie showed that the forgery was done to manipulate the stock price of PSTL, Sebi said. In its Thursday interim order, Sebi also debarred 228 persons and entities from trading in the markets, including initial public offerings. It also barred Rakesh Sharma, a former executive of Adfactors PR Pvt. Ltd, and Rajesh Unnikrishnan, an assistant editor with The Economic Times, from any activity, either direct or indirect, in the equity markets.
Sebi further said that the probe prima facie found that Kotecha was one of the major beneficiaries of the manipulation and appeared to have largely masterminded the forgery.
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First Published: Thu, Jun 25 2009. 11 00 PM IST