The Hindu Business Line : SEBI bars Pyramid Saimira from accessing market for 7 years

Mumbai, Nov. 10 SEBI in an order issued on Tuesday barred Pyramid Saimira Theatre Ltd (PSTL) from accessing the securities market, directly or indirectly, for a period of seven years. The market regulator found the entertainment company guilty of aiding and abetting seven persons to corner shares of the company under the employee category to the detriment of the common investors.

The IPO of PSTL was oversubscribed only 0.015 times in the employee category (excluding the applications made by the seven persons who were masquerading as employees). There would have been a shortfall in subscription in the employee category which would have gone to other categories if the seven persons would not have cornered the shares. SEBI said that PSTL assisted the seven persons to “don the cloak of the employees” and helped them to corner shares; this artifice employed by PSTL is prohibited under the Prevention of Fraudulent & Unfair Trade Practices regulations.

A SEBI investigation into the allotment of shares reserved for the employee category in PSTL’s initial public offering of December 2006 revealed that the company had allotted 98.5 per cent of shares under the employee category to seven persons who were not its employees. Accordingly SEBI had issued a show cause notice to PSTL and these seven persons in February 2008.

Earlier in April, SEBI had debarred Mr Nirmal Kotecha, a former promoter of PSTL, and over 250 other entities from dealing in the securities market including IPOs in any manner till further orders. SEBI had investigated into the origin of a fake SEBI order in December 2008 and its impact on the share price of PSTL which greatly benefited Mr Kotecha, who emerged as the biggest seller of the shares of PSTL on December 22, 2008.

The SEBI order had also debarred Mr P.S. Saminathan, PSTL’s promoter-cum-Managing Director, from dealing in the securities market for his misleading public announcement and for facilitating Mr Kotecha to produce a fake SEBI order to enable him to offload the shares of PSTL in the market at artificially raised prices.

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SEBI bars Pyramid Saimira from accessing market for 7 years