SEBI slaps trading bar on Pyramid Saimira bosses

The Securities and Exchanges Board of India has blown the lid off a forgery masterminded by Nirmal N Kotecha, the promoter and one of the largest stakeholders of Pyramid Saimira Theatre Ltd. On Thursday, SEBI barred Kotecha as well as the company's chief executive P S Saminathan from trading on the Indian stock exchanges.

The investigations have revealed a nexus between Kotecha, Rakesh Sharma - a PR agent representing Adfactors – and senior Economic Times journalist Rajesh Unnikrishanan, along with a few market operators. 

Commenting on the situation, N Narayan, Director, Pyramid Saimira, said the company welcomes SEBI's order because it has been a victim of price manipulation. ''So that only vindicates that some vested interest were disturbing us.''

A release issued by the regulator said that Mr Kotecha had "masterminded" the forgery of a SEBI letter purportedly directing the promoters of PSTL to make an open offer to minority shareholders. After the forged letter was exposed in the media, Kotecha used the temporary spurt in the stock price to offload a substantial portion of his holding in the firm.

"Nirmal N Kotecha was found to be using a large number of front accounts including his related persons/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," the release said. 

On the chief executive officer, the regulator said, "P S Saminathan has prima facie made misleading public announcements only to create public interest in the scrip of PSTL for facilitating Nirmal Kotecha in off-loading the shares of PSTL at artificially inflated price in the market." 

SEBI has passed a similar order against Rakesh Sharma, an exemployee of public relations firm Adfactors, and Rajesh Unnikrishnan for having allegedly "facilitated the publication in the media of the forged letter." ET says it is looking into the matter.

Stockbroking firm Keynote Capital has been barred from giving any trade recommendations on listed companies till further notice, while two other brokerages, India Capital Markets and Dynamic Stockbroking, have been barred from entering into any fresh agreements with new clients.