Click to play videoMumbai: A company director, a PR executive and a journalist - ingredients of another scam that has shaken but not surprised the stock market. This one involves an entertainment company called Pyramid Saimira Theatre Limited.
Market regulator Securities Exchange Board of India (SEBI) has taken swift action. In an interim order, it has barred a promoter and over 250 other entities from dealing in the securities market including IPOs in any manner till further orders.
Editor MoneyLife magazine, Debasish Vasu says, "There was fraud, forgery, an effort to destabilise the market."
December 22, 2008 there were media reports of a SEBI order for the promoters of the company to make an open offer for alleged violation of 'creeping acquisition norms' to drive the share price up by 10 per cent. Subsequent investigations revealed bulk trading by a few promoters, as well as a larger game plan that involved forgery, manipulative transactions as well as doctored public relations that led to misleading news reports.
"The first thing is an arrest, a 14-day remand. The case then comes up and goes on forever. Your life is finished," says Vasu.
An investigation saw a combination of financial as well as investigative wizadry. Sleuths worked on the stock market purchases of the Saimira scrip all through six months before and after December 22, 2008. They also simultaneously tracked the cell phone movement of each and every accused to discover that all the three accused had met up the same day the fraud occurred.
"This action of holding up a journalist of the Economic Times as a culprit, a part of the cartel, as a colluder is fantastic evidence of what can actually happen and what SEBI has actually unearthed," says Vasu.
So even as SEBI takes cognizance of the fraud, the ball now perhaps lies in the courts of the Enforcement Directorate and the Federal Investigations Unit as well as the Mumbai police who could maybe initiate a few arrests in this case.
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