The Securities Appellate Tribunal (SAT) has allowed Nirmal Kotecha to sell the shares of a firm towards payment of the disgorgement amount as ordered by in the nearly decade-old Pyramid Saimira Theatre matter. The proceeds from sale of the shares of Usher Agro Ltd will be deposited in an escrow account with the Securities and Exchange Board of India (Sebi), the SAT said in an order dated August 1. Earlier in March, the regulator had imposed a 14-year ban from the securities market on Kotecha as well as penalty worth over Rs 3.2 million with respect to fraudulent trades in Pyramid Saimira Theatre shares that happened almost ten years ago. The ban on Kotecha is effective since April 23, 2009. “It is not in dispute that this Appellate Tribunal had passed a number of orders allowing parties who were restrained from the securities market to sell the shares that they were holding and keep the proceeds in escrow accounts with Sebi,” the SAT said. “… No prejudice would be caused if such a relief is granted,” it added.

Noting that Kotecha is willing to sell the shares of Usher Agro and deposit the proceeds in an escrow account with Sebi as well as to pay the disgorgement amount ordered by it in its order passed in March 2018, the Tribunal said “the relief sought for is allowed”. Kotecha had filed an application seeking to sell the shares of Usher Agro held by him under Sebi’s supervision and to keep the proceeds in an escrow account with the regulator and to facilitate payment of the disgorgement amount. The Pyramid Saimira case is one of the biggest pertaining to insider trading and fraud. Kotecha sold a huge number of shares of Pyramid Saimira in December 2008 after dissemination of false information in the media based on a forged Sebi letter asking promoter P S Saminathan to make an open offer. The forged Sebi letter was alleged to have been planned and executed by Kotecha himself and people working with him.

Taking action in the case, the Securities and Exchange Board of India (Sebi) had passed interim orders against more than 200 entities, including Kotecha, on April 23, 2009, barring them from capital markets. The Sebi probe later found that Kotecha and entities associated with him, including his friends and relatives, made significant undue profit from the publication of forged letter and the consequent trading activities, which enabled them to offload substantial holdings in shares of Pyramid Saimira.