The Supreme Court on Friday dismissed a petition by Madras-based entertainment company Pyramid Saimira, challenging a seven-year trading ban imposed on it by the Securities and Exchange Board of India (SEBI).
The bench, headed by Chief Justice S.H. Kapadia, dismissed the petition filed by Pyramid Saimira requesting it to stay SEBI’s direction to stop the company from trading after it found that Pyramid had alloted shares earmarked for staff under its initial public offering (IPO) to seven people masquerading as employees.
The court also declined Pyramid's plea that since SEBI had penalised its guilty directors, the ban should be lifted as it would hurt shareholders.
"We do not want such a firm to continue," the bench said.
SEBI on November 10, 2009 banned the firm after a probe found that Saimira Theatre, which ostensibly issued 4,22,220 shares under its IPO to employees, had allotted these shares to seven ghost employees.