Market regulator Sebi has refused to reconsider its decision to bar Manilal Kotecha, who has been alleged to have played a key role in the forgery and share price manipulation of Pyramid Saimira, from dealing in securities market.
In April, Sebi had barred Manilal Kotecha and promoters of Pyramid Saimira Theatre -- Nirmal N Kotecha and P S Saminathan -- from trading in securities for allegedly forging a Sebi letter, which claimed that the regulator had allowed them to make an open offer for raising stake in the company.
"I do not find this a fit case to revoke the ad interim directions till the completion of investigation. I am convinced that the interim order against Manilal Kotecha needs to continue," Sebi said in a statement today, turning down Kotecha's plea.
Sebi further said that his role or involvement in the whole manipulation would be reviewed after the investigation is over.
On April 23 this year, Sebi had said that Manilal Kotecha was prima facie found to have played a key role in facilitating Nirmal Kotecha "in carrying out suspicious banking transactions, carrying out and disguising his manipulative intent and gaining advantage from the forgery".
The order in this case pertains to the media reports in December last year, which said that Sebi had directed Saminathan to make an open offer for an additional 20 per cent stake at a price not less than Rs 250.
Later, Sebi clarified that it had issued no such order or letter to Saminathan and conducted a probe which revealed that the forgery was done to manipulate the stock prices of Pyramid Saimira Theatre.
Sebi found that Nirmal Kotecha was one of the major beneficiaries of the manipulation and appeared to have largely masterminded the forgery.
The regulator added that Nirmal Kotecha was using a large number of front accounts, including those of people and entities related to him, to manipulate the securities market and to route the funds through several layers to hide the source and flow of funds.
Manilal Kotecha had filed objected to this order on May 15, saying that it had resulted in deprivation of his right to carry on legitimate business activities.
