You are here: Home » PTI Stories » National » News
Business Standard

Pyramid Saimira case: Sebi bans Nirmal Kotecha for 14 yrs from mkts

Press Trust of India  |  New Delhi 

Sebi today imposed a 14-year ban from the securities market on Nirmal Kotecha as well as penalty worth over Rs 32 lakh with respect to fraudulent trades in Pyramid Saimira Theatre shares that happened nearly ten years ago.

Kotecha will have to serve only little over 5 years of ban since he has been barred from the securities market since April 23, 2009.

In a 73-page order, the regulator said Kotecha had violated various norms, including prohibition of fraudulent and unfair trade practices.

He has been restrained from "accessing the securities market and further prohibit him from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of 14 years," the order said.

The 14-year debarment will stand reduced by the period already undergone since April 23, 2009, it added.

Further, he has been asked to pay an amount of Rs 32,50,882, along with interest at the rate of 12 per cent per annum from December 22, 2008 onwards.

The amount has to be paid within 45 days.

According to the regulator, Kotecha had made a "unlawful gain of Rs 38,74,981".

In a separate order pertaining to the same case, Sebi also directed nine individuals to pay "jointly and severally" an amount of Rs 22,69,461, along with an annual interest at the rate of 12 per cent from December 22, 2008.

The individuals are Rajesh Jayantilal Shah, Nirmal Rohitbhai Shah, Devang R Shah, Ritaben Rohitkumar Shah, Binaben Shaileshkumar Shah, Namitaben Sachinkumar Shah, Sachin Jayantilal Shah, Manishaben Rajeshkumar Shah and Jinny Nirmal Shah.

The Pyramid Saimira case is one of the biggest pertaining to insider trading and fraud. Kotecha sold a huge number of shares of Pyramid Saimira 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 Securities and Exchange Board of India (Sebi) had passed interim orders against more than 200 entities, including 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.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 22 2018. 22:35 IST