Finally, stock market operator Nirmal Kotecha (in the picture) is in the Securities Exchange Board of India (SEBI) net. The man, along with many others including journalist Rajesh Unnikrishnan (who works with India's leading pink newspaper) and P S Saminathan, the promoter of digital cinema chain Pyramid Saimira, have been accused of sending a fake letter supposedly from SEBI asking Pyramid Saimira to make an open offer at a price much higher than the then prevailing market price.
The company was sent a forged letter of SEBI asking Saminathan to make an open offer to minority shareholders. The company, based on this forged letter, announced that SEBI had asked Saminathan to make an open offer to acquire 20% of shareholding at a price of Rs 250/share, more than four times the ruling market price. Later it was found that SEBI had not sent any such advisory and the letter was forged. The matter came under investigation of SEBI. The market regulator today came out with the order alleging Kotecha, Saminathan and others prima facie guilty of the offence.
This letter sent on December 22, 2008 had resulted in a major jump in share prices and the group had benefitted from this jump, according to SEBI. Kotecha was a major seller in the Pyramid Saimira scrip on December 22, 2008, the day the news broke. He sold 15,05,862 shares on market at an average price of Rs. 75.85 per share on that day. It is seen that out of the same, he sold 6,69,611 shares on BSE and NSE at an average rate of Rs. 80.92 per share on December 22, SEBI said in a statement. The regulator has now barred Kotecha and his associates from accessing stock markets till further notice.
Kotecha was one of the largest shareholders of Pyramid Saimira and is considered the biggest beneficiary of the price manipulation caused by the letter. Kotecha had resigned from the board of Pyramid Saimira last November. As of January 9, 2009, Kotecha held just 67,502 shares representing 0.24% as against his holding of around 24% last September. So he had offloaded most of his stake between September 2008 and January 2009.
In fact, before the IPO of Pyramid Saimira in December 2006, Kotecha held 8.48 million shares representing 42% stake as a person acting in concert.
Kotecha also runs "private equity firm" Kotecha Capital, which had reportedly invested Rs 500 crore in a Bangalore based pizza company United Pizza. VCCircle's attempts to contact Kotecha to verify this development were not successful then.