Mumbai: Market regulator Sebi on Thursday barred Pyramid Saimira Theatre promoters Nirmal N Kotecha and P S Saminathan from trading in securities for allegedly forging a Sebi letter allowing an open offer.
In an interim order, pending investigation and passing of final order also debarred 228 persons and entities from trading in the markets including IPO.
The order in Pyramid Saimira case relates to media reports in December last year that Sebi had directed Saminathan to make an open offer for an additional 20% stake at a price not less than Rs250.
Also Read Sebi Order (Full Text)
Later, Sebi clarified that no such order or letter has been issued by Sebi to Saminathan.
A few journalists were also barred from trading in securities market for their alleged role in the matter.
The regulator conducted a probe into the matter which prima facie reveal that the forgery was done to manipulate the stock price of Pyramid Saimira Theatre Ltd, Sebi said.
Sebi further said probe prima facie found that Kotecha was one of the major beneficiaries of the manipulation and appeared to have largely masterminded the forgery.
The regulator also said Kotecha was also found to be using a large number of front accounts, including his related persons and entities, to manipulate the securities market and to route the funds through several layers in order to hide the source and flow of funds, and this prima facie appears to be a money laundering activity.
A copy of the order is also being sent to the Financial Intelligence Unit-India and the Reserve Bank for further verification.
“These acts of Nirmal N Kotecha are detrimental to the interest of genuine investors in the securities market and pose a threat to the efficient functioning of securities market. Several persons and entities have been prima facie found to have aided/abetted Nirmal Kotecha in these activities,” Sebi said in the interim order.
Sebi also prohibited stock broker India Capital Markets and Dynamic Stock Broking from entering into any new pacts with new clients till further orders.