SEBI Court Refuses To Discharge Pyramid Saimira Director V Natarajan In Securities Fraud Case

The special SEBI court has refused to discharge V Natarajan, director of Pyramid Saimira Theatre Ltd (PSTL), from a case filed by the Securities and Exchange Board of India (SEBI) in 2016 alleging violations of securities laws.

SEBI sought to prosecute the company and its directors for allegedly showing inflated profits in 2007-08 and inducing investors to purchase the company's shares.

SEBI Allegations Against Company And Directors

According to the prosecution, PSTL and its directors were found guilty by a SEBI order dated April 18, 2011, for making false disclosures and misleading statements that harmed investors.

The order was challenged before the Securities Appellate Tribunal (SAT), which dismissed the appeal on June 29, 2011.

Claims Of Inflated Financial Results

The prosecution alleged that PSTL's unaudited quarterly financial results showed a sharp rise in revenue for the quarter ended June 30, 2007, compared with the previous quarter.

This upward trend continued until the quarter ended September 30, 2008.

SEBI claimed former chairman and managing director PS Saminathan published financial results for 2007-08 containing inflated figures and exaggerated profits to project an overly optimistic picture of the company.

Natarajan Cites Resignation

Natarajan argued that the complaint did not show he was in charge of or responsible for the company's affairs.

He contended that he resigned as director before the board approved the financial results.

Court Rejects Discharge Application

Opposing the plea, SEBI prosecutor Anubha Rastogi argued that Natarajan had sold his shares to Saminathan, who later pledged them.

The court rejected Natarajan's application, holding that he was being prosecuted for his own acts as a director and not on the basis of vicarious liability.

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