Pyramid to go ahead with share transfer

MUMBAI: In a clear act of defiance, a promoter of Pyramid Saimira Theatre said on Monday that the inter-se transfer of shares within the promoter group would proceed as planned, even as SEBI has questioned the legal aspect of such a deal.

In a letter to PS Saminathan ��� one of the promoters of the company ��� on December 19, the regulator had sought an explanation for his intent of buying a 23.47% stake from Mr Kotecha even while the latter was holding these shares for less than three years.

SEBI regulations allow for inter-se transfer between promoters, but only after the shares have been held for at least three years. ���Mr Saminathan is going to buy (shares) as per the agreement,��� said Nirmal Kotecha who, as of September 2008, held a total of 24.89% stake in the company. ���The company is also working on the open offer,��� he added.

SEBI had asked the company to make an open offer since Mr Saminathan had acquired more than 5% in the company by way of creeping acquisition in 2008.

Meanwhile, marketmen appear quite puzzled when asked about the proposed open offer, as the promoter would have to shell out a huge premium over the current market price. SEBI has ordered Mr Saminathan to come out with an open offer at Rs 250 per share, at a time when the stock is trading at Rs 67.90.

���At Rs 250 per share, the open offer size comes to Rs 141 crore,��� said a dealer with a domestic broking firm. ���It is a large sum of money to arrange for in the current market scenario,��� he added. Interestingly, during the morning trading session, there was a buzz in the market that the company is likely to move Securities Appellate Tribunal (SAT), challenging SEBI���s order on the open offer.

Shares of Pyramid Saimira, which surged 10% during the morning session to touch a high of Rs 82.90, lost ground and closed at the lower end of the intra-day circuit at Rs 67.90, down 10% over its previous close. Meanwhile, SEBI���s letter to Mr Saminathan clearly points out various anomalies in his recent transactions in Pyramid Saimira���s shares.

The market regulator has questioned him for buying four lakh shares on November 19, 2008 at a price much lower than the proposed Rs 200. It has also sought an explanation for a media release announcing the intention to acquire a 25% stake from the other two promoters ��� NC Ravichandran and Mr Kotecha ��� at Rs 200 per share when the market price was only Rs 60.