Journalism’s Hall of Shame

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Journalist among 230 barred by SEBI for ‘forgery’ to rig stock

Mumbai: The Securities and Exchange Board of India today passed an
interim order barring two promoters of publicly listed entertainment
company Pyramid Saimira Theatre Ltd, and 228 others, for allegedly
forging a letter and passing it off as a Sebi order in December 2008
to manipulate the company’s stock resulting in substantial losses to
investors.

Key to the alleged conspiracy, according to today’s Sebi order, is the
forged letter asking one of the promoters P S Saminathan, chairman and
managing director of Pyramid Saimira, to make an open offer for an
additional 20 per cent stake at a price not less than Rs 250. The
order says that the other promoter Nirmal Kotecha had sold over 15
lakh shares on Monday, December 22, the day some newspapers published
a story based on the forged letter.

In its order, Sebi said that Rakesh Sharma, then an executive with
public relations firm Adfactors PR Pvt Ltd and Rajesh Unnikrishnan,
Assistant Editor, The Economic Times, a business daily belonging to
the Bennett Coleman & Co Ltd, “played a key role in the forgery,
dissemination of information and misleading the media to believe its
authenticity.”

Kotecha, the order says, even propped up an “imposter” who posed as
Company Secretary and “confirmed” the forged letter to reporters who
called up to check.

When asked for his comment, Rahul Joshi, Executive Editor, The
Economic Times, said: “We have seen the order. We are studying it.”

According to the Sebi order, tower location of mobile telephones used
by Sharma, Kotecha (registered in the name of one Amol Kokane) and
Unnikrishnan indicated the three met on December 20, around the time
when the forged letter was circulated to the media. Sharma, whose
service was terminated by the PR firm the very next day (Tuesday,
December 23), had in a statement to Sebi which he later retracted,
also admitted that Unnikrishnan and he went to Kotecha’s residence to
mail the forged letter to “media friends.”

Once the market regulator issued a press statement that it had not
issued any such letter on December 23, Sharma was terminated from his
service by the PR firm, which never had Pyramid as a client.

The other significant part of the plot, the order said, was the
attempt to ensure by the trio to not just disseminate the forged
letter to the media, but also make the media believe its authenticity.
Sharma, who has been a business journalist earlier, used the services
of two former journalists Dheer Kothari and Ashok Jainani to spread
the information, Sebi said.

When a reporter sought to ascertain the veracity of the information in
the forged letter, Kotecha sent the number of one Ganesan working in
the company’s Chennai office to Sharma by SMS. When the reporter got
back stating that the contents were denied by Ganesan, Kotecha
provided another telephone number, purportedly of Pyramid Saimira’s
Company Secretary Kanhucharan Sahu to Sharma, the order said based on
the latter’s statement to Sebi.

Unnikrishnan too provided the contact details to Sharma, the order
said. When reporters called this number, the person, one Pratheesh
Kumar V.K. — an imposter, according to the order — confirmed that the
company had received the letter.