Sebi disposes of suit against 3 people in Pyramid Saimira case

Sebi has disposed of a case against three individuals that charged them of trading in securities despite being barred from accessing the capital markets for their role in Pyramid Saimira Theatre case.
The Securities and Exchange Board of India in April 2009 had restrained -- Shailesh Jayantilal Shah, Ritaben Rohitkumar Shah and Rajesh J Shah -- from dealing in the securities market till further directions.
However, it was noted by the market regulator that the three entities had traded in shares of Motial Oswal Securities in May 2009 in violation of Sebi's order.
"Though the trades have been carried out on May 7, 2009, several days after the receipt of the order of debarment by the noticees, there is not any reliable evidence on record to establish that the sell orders were placed by the noticees themselves," Sebi adjudicating officer Barnali Mukherjee said in an order dated July 2.

"I do not find it a fit case to impose any monetary penalty on the noticees. The case is accordingly disposed of," Mukherjee added.
The Pyramid Saimira case is one of the biggest pertaining to insider trading and fraud. A former promoter Nirmal Kotecha sold a huge number of shares of Pyramid Saimira Theatres in December 2008 after dissemination of false information in the media based on a forged Sebi letter asking promoter P S Saminathan to make an open offer.

The forged Sebi letter was alleged to have been planned and executed by Kotecha himself and persons working with him.

Taking action in the case, the Sebi had passed interim orders against more than 200 entities, including Saminathan and Kotecha, on April 23, 2009, barring them from capital markets.
The Sebi probe later found that Kotecha and entities associated with him, including his friends and relatives, made significant undue profit from the publication of forged letter and the consequent trading activities, which enabled them to offload substantial holdings in shares of Pyramid Saimira.