Fake Sebi letter hits Pyramid, probe soon | business | Hindustan Times
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Fake Sebi letter hits Pyramid, probe soon

business Updated: Dec 23, 2008 20:57 IST
HT Correspondent

Pyramid Saimira, a Chennai-based small player in the media and entertainment space, normally goes unnoticed on the Bombay Stock Exchange (BSE).

But on Tuesday, the Pyramid stock was in the limelight. The company “confirmed” to the exchange in the morning that its chairman PS Saminathan had indeed received a directive from the market regulator to buy 20 per cent of the company’s shares from public shareholders, for no reason.

It had denied a newspaper report on Monday which said the company’s chairman has been asked by Securities and Exchange Board of India (Sebi) to make an open offer to buy 20 per cent of public holding.

A company is required to buy a minimum of public shareholding only under the code that deals with takeover of companies. Otherwise, promoters are allowed to make creeping acquisition up to 5 per cent a year.

The fake letter had directed the company’s chairman to buy shares at Rs 250 per share, about four times the market price. This led to a rise in the price of shares of the company initially to Rs 68.25 from the previous close of Rs 67.90.
But after it became known that the directive was fake and that Sebi had not sent any letter to the company chairman, the share price fell sharply.

The shares of Pyramid Saimira closed at the lower circuit limit of Rs 61.15 per share, down 9.9 per cent from previous close.

Sebi in the evening issued a statement saying it will investigate the circulation of the fake directive to Pyramid Saimira.

The capital markets regulator clarified that “no order or letter has been issued by Sebi to PS Saminathan on December 19, 2008.”

It blamed the creation and circulation of the fake directive to some “ulterior motives”, but kept mum on the possible brains behind it. Sebi will investigate the origin of the letter and also the details of trading in Pyramid Saimira shares. Pyramid Saimira shares are down 88 per cent this year.