Panchpikesa Subramania Saminathan, the chairman & managing director of Pyramid Saimira Theatre (PSTL), first hit the headlines in early 2008 after announcing a slew of big-budget movies featuring Rajini Kanth, Kamal Hassan and other leading stars. Last week, he hit the headlines again, but for all the wrong reasons: Market regulator Sebi banned PSTL and its promoters — including Saminathan — from accessing the markets for ten years for price rigging company shares with the help of few media professionals.
Until 2008, Saminathan’s company made quite a few films, but none had much box-office success. In the quarter ended March 31, PSTL's losses totalled Rs 5.20 crore, compared with a profit of Rs 14.06 crore a year earlier. Income was nil, compared with Rs 80.69 crore. The company had eight subsidiaries, which were later sold or merged with the parent.
The former aquaculture economist’s first brush with Sebi was in Novemver 2009, when the regulator barred PSTL and its promoters from dealing in securities or accessing the securities market directly or indirectly for seven years for fraudulent allotment of 98.5 per cent shares reserved for employees in a December 2006 IPO to seven persons, who were not employees. According to Sebi, the company sold the shares soon after listing and made an unlawful gain of Rs 2.31 crore.
The IPO was oversubscribed 15.5 times in the retail category, 28.09 times in the HNI category, 17.18 times in the QIB category and only 0.015 times in the employee category (excluding the applications made by the seven persons). Then followed a Madras High Court order, which directed its provisional liquidator to take charge of PSTL’s assets. This came in response to a petition filed by Patni Financial Services, one of the lenders to which PSTL owed Rs 5 crore.
According to PSTL, its principal outstanding and corporate guarantee is around Rs 152 crore and FCCB holders currently have an outstanding of Rs 378.78 crore. When contacted at that time, Saminathan said: “I am not going to do anything against it.” On December 23, Sebi again banned PSTL from trading in national markets on grounds of forgery and directed Saminathan to make a public offer through a merchant banker to acquire shares of PSTL from public shareholders. Clearly, Sebi’s spotlight will remain on Saminathan for some time.
