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Share at Rs 75. Open offer Rs 250

Sebi has cracked down on a promoter of entertainment company Pyramid Saimira Theatre Ltd, P S Saminathan, for violating the Sebi SAST regulations.

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MUMBAI: The Securities and Exchange Board of India (Sebi) has cracked down on one of the promoters of Chennai-based entertainment company Pyramid Saimira Theatre Ltd (PSTL), P S Saminathan, for violating the Sebi Substantial Acquisition of Shares and Takeover (SAST) regulations.

The regulator has asked Saminathan, who holds a 22% stake in the company, to make an open offer to acquire further 20% at not less than Rs 250 per share.

PSTL shares closed at Rs 75 on Friday on the BSE.

That would mean Saminathan will have to shell out at least Rs 141 crore for the acquisition. "You are advised to file the prospectus for public announcement for open offer and acquiring further 20% of shareholding within 14 days," Sebi said in its order on December 19 to the promoter, a copy of which is with DNA Money.

A Pyramid Saimira spokesperson told DNA Money on Saturday the company just received the notification and is looking into the matter.

The open offer was triggered as the promoter violated the creeping acquisition limit of 5% per year. Saminathan acquired 691,500 shares (2.45%) between November 19 and December 5, taking his total purchases this year to over 7%.

According to Sebi rules, the open offer price shall not be less than the price at which the promoter had made acquisitions during the preceding 26 weeks.

In June, he had bought a 4.89% stake in the company at Rs 250 per share in a desperate attempt to prop up the prices, which had fallen nearly 60% from December 2007 peak of Rs 551.

In the same order Sebi has put a lid on another deal, which Pyramid had announced in October.

Sebi has effectively put a hold on an inter se share transfer of 25% stake between Saminathan and two other promoters for Rs 150 crore, which the company had announced in October.

According to the announcement, it had been agreed that Saminathan will buy the stake of N C Ravichandran (0.04%) and Nirmal Kotecha (24.89%). Saminathan was to pay @ Rs 200 per share to them. The transfer was to take place on December 22, Monday.

Even as it questioned the rationale behind pricing the deal at over 3 times the prevailing market price of Rs 60, Sebi said the transaction in itself is void because the shares of Kotecha are not eligible for transfer.

Sebi has also questioned how the promoter bought shares at a much lower price in the market when he has proposed to buy them. Saminathan's current holding in the company stands at nearly 22% and after the open offer is expected to go up to 42%.
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