wordpress blog stats
Connect with us

Hi, what are you looking for?

Pyramid Saimira Promoter PS Saminathan, 230 Barred From Trading

sebipyramicMarket regulatory body SEBI has clamped down on primary promoter of struggling theatre retail firm Pyramid Saimira, PS Saminathan, for his alleged involvement in the forged open offer letter scam.

Saminathan, the SEBI Order (Release | 54 Page Report) says, helped ex-promoter Nirmal Kotecha off-load shares of PSTL at an artificially inflated price in the market. He has also been deemed guilty of misleading the public and trying to boost the scrip of PSTL with his statements.

The Open Offer Letter

In December, a forged letter of SEBI ordering Saminathan to make an open offer at a price that was at a substantial premium to its market price pushed the company into the limelight. Already suffering from bad fortunes, PSTL’s stock has taken a nose dive, losing 94% of its market value in the past 6 months. The sudden dumping of shares by a Pyramid ex-director, Nirmal Kotecha, who held close to 25% of shares and had resigned from the company in November, sparked talk of price manipulation amongst shareholders.

In the report of its investigations into the forged letter and Kotecha’s tradings, SEBI has brought to light various aspects of allegedly fraudulent activity. Over 230 entities involved in it have been barred from trading on stock exchanges.

Saminathan: A Victim Of Circumstances?

Advertisement. Scroll to continue reading.

In June 08, Saminathan had informed the exchange that he was purchasing 13,70,000 shares worth 4.845% of equity from Kotecha. His holding was already 17.29% so the buy was subject to SEBI regulations which required both the parties to have held shares in the company for three years. But Kotecha had not been with the company for that period so the purchase was illegal.

In October 2008, Saminathan announced he would purchase 70,45,619 equity shares aggregating to 25% from N.C. Ravichandran and Kotecha, by way of inter-se transfer on November 28, 2008. The price was fixed at Rs 200 per share but the company sent another announcement to the BSE that the transfer was postponed to December 22, 2008 and that the price would be Rs 200 or market price, whichever was lower.

Notwithstanding this announcement, Saminathan went ahead and bought Kotecha’s shares on November 19 at an average price of Rs 50 per share on BSE. He purchased a total of 8,43,942 shares of PSTL in market transactions at an average price of Rs 45.67 per share between October 24 and December 5, even as he claimed that “competitors and big business interests are behind the constant hammering of its share price and are creating a panic among investors”. SEBI has noted that its interim investigation reveals that Saminathan was facilitating Kotecha in offloading the shares of PSTL in the market at artificially raised price.

The company’s director N Narayanan has told CNBC-TV18 that Saminathan was “a victim of circumstances” and will prove his innocence.

Kotecha Charged With Stock Manipulation, Money Laundering

Nirmal Kotecha, the largest shareholder of PSTL till November when he exited, has been charged with manipulating the securities market and money laundering. Nineteen associates/ entities related to Kotecha have been identified as having participated in it with banking transactions, forgery and abetting the alleged scam.

Advertisement. Scroll to continue reading.

Kotecha’s manipulation can be observed in the prices of PSTL’s scrip -from Rs 80.92 in December, when he was actively selling his shares to Rs 26.25 in January when he stopped. Just the day before he stopped trading, the price was Rs 41.40 on the BSE. Now, the company’s stocks have hit an all time low at Rs 13.15 as on March 5, 2009 on BSE.

Following his bank account trails, SEBI also found that Kotecha had been carefully withdrawing large amounts of cash in small individual portions of below Rs 10 lakhs each to evade suspicion from banking regulators. He transferred funds to his wife, relatives and an engineering college student to hide his trails.

His wife Viral Doshi has been barred from trading as she has been charged with aiding Kotecha.

His activities during December:

-Kotecha sold 15,05,862 shares on December 22, 2008 at an average price of Rs. 75.85 per share. Out of them, 6,69,611 shares were sold at an average rate of Rs. 80.92 per share.

– A total of 40,29,254 shares were traded on the NSE on December 22nd – three times that of the previous day. PSTL’s scrip had opened at Rs. 83, a rise of 10% from the previous day’s closing price of Rs. 75.45. It closed that evening at Rs. 67.90. Kotecha sold 4.45 lakh shares when the price was Rs. 83 to Rs. 77.50, accounting for 39.87% to market (net). He sold 3.45 lakh shares when it was between Rs. 77.50 to Rs. 67.90 and another 0.51 lakh shares later.

Advertisement. Scroll to continue reading.

– On BSE on the same day, Kotecha, dealing via Kotak Securities and IL&FS Investsmart, sold a whopping 2,25,444 shares at an average price of Rs. 81.02, just before PSTL issued a denial of the news that was already in the dailies that it had received a letter from SEBI ordering it to go in for an open offer.

– The denial sent the price spiralling down from Rs 79.60 to Rs 74.10 at 12.16.33 p.m. Kotecha continued to sell, this time via IL&FS Investsmart and India Capital Markets – he sold 67,983 shares at an average rate of Rs 76 and 3,71,768 shares at Rs 68.36.

– Kotecha also shared his fast money making tip with his maternal uncle Deepak Thakkar who made a profit of Rs. 20,76,064. Thakkar hurriedly bought 19,758 shares, 80,000 shares and 85 PSTL shares on December 16, 17 and 22 respectively. The majority were bought for Rs 53.96 and Rs 62.04.

-On December 19th, news of the open offer letter was published.

– On December 22nd, just before Saminathan denied the news, he sold 99,843 shares for Rs 80.10 to Rs 82.30. These timely orders, according to SEBI, were given by Kotecha.

Others Allegedly Involved

Advertisement. Scroll to continue reading.

An engineering college student from Mumbai was allegedly used as a front for Kotecha’s share market game. The youngster, a relative of Kotecha’s accountant, was made to open an account with India Capital Markets which was then apparently solely operated by Kotecha, who already had an account in his name. This account was used by Kotecha to influence volumes and price of PSTL’s scrip. It contributed to over 20% of the market volume during 2 days in November, which affected the share price considerably.

A PR Executive & Journalist Implicated; Located Using Cellular Operators

Rajesh Unnikrishnan, an assistant editor at Economic Times and Rakesh Sharma, previously an executive with Adfactors PR agency have been charged with giving publicity to the forged letter. Unnikrishnan and Sharma were previously colleagues in Business Standard. SEBI has tracked down the cellphone locations of the two and confirmed that Kotecha met with the two prior to Sharma’s circulating the email about the forged letter. Mails were sent to Times of India, DNA, Economic Times, Business Standard, Telegraph and Hindu Business Line.

With its promoter now tagged with blame, the Pyramid Saimira’s reputation is sputtering. The company has a myriad of problems and is circling the drain. It reportedly has not paid its employees salaries, has income tax related issues and has had to sell off its gaming subsidiary Aurona. Pyramid’s sigh of relief “We are clear…SEBI’s Letter Forged” may be too early. Is this its death knell?


Pyramid Saimira Quits Gaming; To Sell Subsidiary Aurona; Focus On Core Biz
Pyramid Saimira Bites Back At I-T Dept; 300 Employees Not Paid Salaries; Threat of Solvency?
Pyramid Saimira Selling Stake In Subsidiaries; Cutting Op Losses Further
Pyramid Saimira To Close Unviable Subsidiaries; Stake Dilution Plans
Pyramid Saimira Winds Up Film Distribution In India; Defers Reel Acquisition
Pyramid Saimira Owned Spize TV Buys South Asian Content Focused DTH Co WorldTV Europe

Advertisement. Scroll to continue reading.

Written By


MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



Do we have an enabling system for the National Data Governance Framework Policy (NDGFP) aiming to create a repository of non-personal data?


A viewpoint on why the regulation of cryptocurrencies and crypto exchnages under 2019's E-Commerce Rules puts it in a 'grey area'


India's IT Rules mandate a GAC to address user 'grievances' , but is re-instatement of content removed by a platform a power it should...


There is a need for reconceptualizing personal, non-personal data and the concept of privacy itself for regulators to effectively protect data


Existing consumer protection regulations are not sufficient to cover the extent of protection that a crypto-investor would require.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ