Market regulator Sebi today turned down a request of Kotecha Capital Services, accused of facilitating stock manipulations of Pyramid Saimira, to withdraw an interim order barring it from trading.
"I am convinced that the interim order against KCSPL (Kotecha Capital Services) needs to continue. Furthermore, needless to say the role or involvement of KCSPL in the manipulation will be reviewed after the investigations are completed," said Sebi wholetime member K M Abraham in an order.
Kotecha Capital Services in a letter dated May 15 had raised objections to the regulator's interim order. It had denied the allegations made against it in the Sebi order that the company had aided one Nirmal Kotecha, the prime accused involved in the manipulations of Pyramid Stocks.
"Not even a prima facie case has been made out to warrant the issuance of such an ex-parte order of serious consequence against it and that the imminent urgency has not been explained to support the order," the objection letter from Kotecha Capital had said.
It even added that on the date of passing of the order Nirmal Kotecha was neither a director nor a shareholder of the company. Sebi in its order turning down the objections said the company will be heard afresh at the stage of the final disposal of the quasi-judicial proceedings initiated against it in the case.
The investigations conducted by Sebi so far have revealed that Nirmal Kotecha had masterminded the forging of letters purported to be that of Sebi and Kotecha Capital was found to have played a key role in facilitating Nirmal Kotecha in the alleged manipulation, the order said.
In one of the forged letters there was a direction from Sebi to P S Saminathan, Chairman of Pyramid Samaira, to make an open offer at the rate of Rs.250 per share. The market price of the Pyramid shares on December 19, 2008 (the date of the forged letters) was very low at Rs 75.45 as compared to the price of Rs 250 per share.
"This indicates that the letters may have been forged only in order to manipulate the market price of the shares of PSTL (Pyramid Saimira Theaters)," the order said.
