The bounce in the Pyramid Saimira stock on December 22 and 23, after the forged Sebi letter surfaced, is now the subject of a public interest litigation in the Supreme Court.
The bounce in the Pyramid Saimira stock on December 22 and 23, after the forged Sebi letter surfaced, is now the subject of a public interest litigation (PIL) in the Supreme Court.
Manohar Lal Sharma, a New Delhi-based advocate, has filed the PIL urging that the apex court direct the Securities and Exchange Board of India (Sebi) and the National Stock Exchange to cancel transactions in the share on the two days.
The case is likely to come up for hearing before Chief Justice KG Balakrishnan on Monday or Tuesday, Sharma, who was in Mumbai on Wednesday, told DNA Money.
The petition also points fingers at Nirmal Kotecha, who had sold over 17 lakh shares in the market bounce.
“It is pertinent to mention that the company’s other promoter Nirmal Kotecha has done heavy dealing in the said shares,” it says.
According to Sharma, it is clear that some people deliberately forged the letter. “When the order available in the public says the share will go up, everyone will rush to buy. Who will be the one going against the order? It is most likely the criminal.”
“Once it is established that the letter was fraudulent. Sebi and the exchanges should have declared the transactions which were induced by the said letter as ‘liable to be cancelled’ as any transaction done under the inducement due to a fraud should be voidable at the option of the affected party,” said Sharma.
According to him, Sebi is obligated to protect the interests of investors. “As a small investor, I have bought a few shares. Like me, hundreds of investors would have been duped. It is not possible for each one of them to proceed against the fraudsters individually as the legal costs would exceed whatever disgorgement they may get. Under the circumstances, Sebi as the market regulator is duty-bound to protect the investor interests by cancelling the transactions.”
However, until the filing of the PIL, neither Sebi nor the NSE had come forward to cancel the trades, he said, adding, Sebi should cancel all transactions following the letter and ensure that investors who were duped get back their money.
Sharma says he bought 500 Pyramid Saimira shares as he was made to believe by the company statements that the market regulator had asked the promoters to make an open offer at Rs 250.
Sharma’s petition also seeks similar remedies from the Supreme Court in the Satyam Computer case.
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