The Securities and Exchange Board of India (Sebi) has restrained five former employees of Pyramid Saimira Theatre Ltd (PSTL) from dealing in the securities market for a period of three years for cornering shares reserved under the employee quota during its initial public offer in an unlawful manner. Sebi has also ordered them to disgorge the unlawful gains, mounting to Rs 2.31 crore, and pay interest at the rate of 20 per cent on the amount from the date of sale of the shares allotted till the date of disgorgement.

PSTL came out with their IPO during December 2006 and shares were allotted to the applicants on January 2007. An investigation conducted by the market regulator revealed that out of a total of 13 persons who had applied for shares under the employee category totaling 4.32 lakh shares, seven employees obtained 98.55 per cent of the shares allotted, received the shares in the demat account with the same depository participant and made an unlawful gain of Rs 2.31 crore by selling it soon after listing.

Sebi order said, “These seven persons in collusion with PTSL, donned the cloak of employee with manipulative intent and cornered the shares under the employee category of the IPO of PTSL. Five of them abandoned the cloak after making application, but before the allotment, whereas two others did immediately after the allotment.”