Marker regulator the Securities and Exchange Board of India (Sebi) today barred three independent directors and members of audit committee of Pyramid Saimira from holding a similar position in any listed company for two years for giving false and misleading statements.
These independent directors are KS Kasiraman, K Natarahjan and G Ramakrishnan.
"(Sebi) restrains KS Kasiraman, K Natarahjan and G Ramakrishnan from being an independent director or a member of audit committee of any listed company for a period of two years from the date of this order," the market regulator said.
Last year, Sebi in a showcause notice alleged that Pyramid Saimira Theatre (PSTL) inflated its revenues and profits by fictitious entries in its accounts.
It disclosed the same in quarterly and annual accounts for the financial year 2007-08 and thereby misled the public in their investment decisions.
"It is also alleged that PSTL made false disclosures to stock exchanges on January 30, 2009 that it had entered into agreement with 802 theatres as on June 30, 2008," it added.
The Sebi said these three people have failed in their duty as independent directors.
"They failed to review, as members of the audit committee, the internal control systems, which generated misleading financial statements," it added.
It further said they facilitated the company to make false and misleading disclosures and thereby created artificial prices and volumes in the securities of PSTL in the market, to the detriment of innocent investors.
"The charge of disclosure of false and misleading statements, as alleged in the SCN against the noticees, is established," it added.
The Sebi further said such conduct on the part of the noticees is disgrace to the institutions of independent directors and the audit committee of a listed company.
"This cannot be viewed lightly and warrants regulatory intervention," it added.
