Pyramid Saimira boss banned from market
24 Dec 2010
Taking a tough stand against manipulation of account books, the Securities and Exchange Board of India has banned P S Saminathan, the former chairman of Pyramid Saimira Theatre Ltd from the capital market for ten years, while his wife Uma Saminathan has been handed a five-year ban.
The SEBI action follows a probe that found severe irregularities in its accounts. Saminathan is also accused of misleading investors, making false corporate announcements and making a preferential allotment to himself without any inflow of funds into the company.
The regulator restrained Saminathan from buying, selling or dealing in securities, accessing the securities market and also from becoming a director in any listed company for ten years.
Moreover, SEBI also directed Saminathan to make an open offer to other shareholders of Pyramid at a price, which will be determined by a valuer.
In a scathing order against the promoters of the company, SEBI said, ''Saminathan has been directed to make a public offer through a merchant banker to acquire shares of PSTL from public shareholders by paying them the value determined by the valuer in the manner prescribed in Regulation 23 of the SEBI (Delisting of Equity Shares) Regulations, 2009 and acquire the shares offered in response to the public offer, within three months from the date of this order.''
The promoter stake in PSTL is around 19.99 per cent while public and others hold 76.19 per cent stake. The Bombay Stock Exchange has been directed to facilitate valuation of shares to be purchased as mentioned above, and delist PSTL if the public shareholding reduces below the minimum level in view of aforesaid purchase.
The SEBI order, passed by its whole-time member M S Sahoo, noted that despite an assurance from Saminathan during his personal hearing at SEBI on a show-cause notice issued in this regard, detailed accounts were not presented to the investigating officer. Further, while replying to the show-cause notice, Saminathan even questioned the qualification and power of the SEBI officials to look into the accounts of the company.
"The investigations into accounts of PSTL cannot be conducted by students of political science who are working with SEBI, but by an independent audit firm," was how Saminathan replied to his show cause notice, and this was quoted in the order. Sahoo noted that the allegations about competence of SEBI officials to investigate affairs of the company were not in good taste.