Citizens' Issues
SEBI officially admits to its manager’s involvement in the Pyramid Saimira case

It required a parliament question by MP Rajeev Chandrashekar for SEBI to admit the involvement of its manager Jerome K Alexander in the infamous “forged letter” sent to Pyramid Saimira by SEBI. While Pyramid Saimira is being wound up, why is the regulator dragging its feet over the Alexander case and his links with Nirmal Kotecha?

In November 2011, when RK Padmanabhan took over as chief vigilance officer (CVO) at the Securities & Exchange Board of India (SEBI), he stirred things up with an internal warning memo about how he was "receiving complaints" about officers helping to "get certain cases settled" through "consultants and advocates". How come then is he dragging his feet over the involvement of Jerome K Alexander, the manager responsible for sending a 'forged' letter to Pyramid Saimira? Why did it require a parliament question to extract information about Jerome Alexander-which Moneylife alone has been reporting? And how come the involvement of a consultant as collection officer led to the arrest of deputy manager Avarjeet under this watch?
Moneylife is the only media to have repeatedly pointed out that the forged letter, which was leaked to several newspapers by stock market manipulator Nirmal Kotecha (including DNA and Business Standard) was the handiwork of a SEBI official. SEBI, which had conducted a searching investigation into the 'leak' of the forged letter, had however kept a tight lid on the involvement of its official. The reply to parliament, also clarified the exact name and designation of the official. Based on information from sources, we had wrongly reported the name as J D'Souza. At that time, we had tried to have the name verified by the executive director in charge but she would not confirm the name. Please see: Pyramid Saimira: Finger points to SEBI Manager in forged letter case or Forgery by SEBI Insider or Consent Orders: Compromised or SEBI is Repeatedly Refused Access to Phone Data … and SEBI: Time for Introspection 
The media finally woke up when Rajya Sabha MP Rajeev Chandrasekhar asked the finance ministry for an answer. SEBI was then forced to reveal that an assistant general manager, Jerome K Alexander is under investigation "relating to his alleged involvement in the issuance of a 'forged letter' to Pyramid Saimira" and has been placed under suspension from 15th April 2011. 
Strangely enough, in response to a question in parliament, minister of state for finance, Namonarain Meena said that the investigation has still not been concluded by the chief vigilance officer of SEBI. This is strange, because SEBI tracked to Mr Alexander through a mobile phone given to him by Mr Kotecha. Moneylife had checked with Mr Kotecha about his link to Mr Alexander and he did not deny it either. What is more interesting is that SEBI has been lobbying furiously for the power to tap phone and demand information from phone companies. If the regulator cannot act against its own, when caught in a flagrant act of corrupt collusion with a market operator, can we trust it to act impartially when it has the power to tap phones at will? Let's not forget, that SEBI has been recently pulled up by the Securities Appellate Tribunal (SAT) for dragging an investigation for 12 long years. This too is a case that cries for a detailed investigation by SEBI CVO. 
But let's go back to Jerome Alexander and the Pyramid Saimira for a moment. This a curious investigation which started with a bang, with excellent work by Dr Pradnya Sarvade, an IPS officer who had taken over as head of SEBI's investigation. It dates back to December 2008, when PS Saminathan, chairman of Pyramid Saimira received a letter from SEBI asking him to make an open offer for 20% of the floating stock at not less than Rs250 a share within 14 days while the ruling market price was only Rs 70 then. This followed Mr Saminthan's decision to acquire 25% stake held by two co-promoters, one of whom being Nirmal Kotecha, a stockbroker. But the investigation quickly fizzled off and turned lop sided to the point where Pyramid Saimira, a profitable, listed company is being liquidated (rather than forcing a change in management) thereby causing losses to tens of thousand shareholders and employees. On the other hand, Nirmal Kotecha, a notorious speculator and a self-confessed admirer the late scamster Harshad Mehta, is still scot free, while the involvement of its own officials has been kept suppressed until today. 
The other two cases that the minister mentions in his reply to the parliament question is that of Rajesh Pratap Singh, another assistant general manager at Kolkata, who was caught by the Central Bureau of Investigation (CBI) accepting a bribe. According to the minister, two cases have been registered against him-for possession of disproportionate assets and for accepting a bribe. 
Mr Chandrashekhar's question to the ministry of finance, based on Moneylife reports was simple: "Whether any investigations have been conducted into the allegations of irregularity, bribery and corruption by the staff" at SEBI. Minister of state for finance Namo Narian Meena responded by giving three examples (Click here to read the PDF document)
The more recent case is the one involving Avarjeet Singh, a deputy general manager, who was also caught by the CBI for accepting a bribe and is now on bail (Bribery: SEBI must show good governance). Here too, we had learnt that the CBI may broaden investigation to nearly a score of entities that were part of the same investigation and order, where Mr Singh had demanded a bribe. 





Vaibhav Dhoka

4 years ago

It was never well at SEBI's intermediary department which has become den of corruption.They are not anwserable as seniors are loaded with their own internal problems.They are like Talathis and Havaldar in revenue and police department.They behave like them.

Pradeep R Hattangadi

4 years ago

See Everything But Ignore - SEBI


4 years ago

i got lot to say about the malpractice in the sebi. my cases still pending with the SEBI. well known [former WTM Mr Abraham and Mr MS Sahoo handled my cases and i have personally given lot of evidences to prove against the fraud has been committed by one brokerages along with the country's biggest depository. but nothing had been taken by the SEBI top officials even at this point of time. i am now processing these through the Court of law since the SEBI has totally proved ineffective with reference to the "investors protection"


4 years ago

Once again I ask the question. Who is watching the 'watchdog'. At present SEBI seems only interested in regulating Mutual Fund distributors. I wish they would rather concentrate on getting their own house in order.


nagesh kini

In Reply to Jayant 4 years ago

This so-called watch dog can neither bark nor bite - it is toothless and high time replaced with a better breed.

ICICI Bank to hike overseas ATM cash withdrawal fee by 17%

“With effect from 15 September 2012 ATM cash withdrawal fee at international location will be...

Premium Content
Monthly Digital Access


Already A Subscriber?
Yearly Digital+Print Access


Moneylife Magazine Subscriber or MSSN member?

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
PNB lowers home, car loans interest rates by up to 0.5%

In the housing loan segment, interest rate has been reduced by 0.25% while interest rate on car loans has been slashed by 0.5% effective today

New Delhi: State-owned lender Punjab National Bank (PNB) slashed interest rates on home and car loans by up to 0.5%, reports PTI.
In the housing loan segment, the rate has been reduced by 0.25% while interest rate on car loans has been slashed by 0.5% effective today.
The decision to lower rate comes within days of finance minister P Chidambaram asking PSU banks to cut interest rates with a view to boosting sales of consumer goods and promoting growth. The minister had cited the example of SBI on how EMI reduction boosted the sales of cars.
Home loans of up to Rs75 lakh would now attract an interest rate of 10.50% or the base rate. Earlier, the interest rate was base rate plus 0.25% amounting to 10.75%, PNB said in a statement.
Similarly, the rate has been reduced for home loans above Rs75 lakh to 10.75% from 11% earlier.
With regard to car loans, three-year loans would now be available at 11.50% against 12%, down by 0.5%.
Car loans above three years would also attract 0.5% lower rate at 12% compared to 12.50% earlier, it said.
Last month, another public sector lender Central Bank of India had announced it will cut interest rates on housing and other loans by up to 0.5% from 1st September.
Last week, Corporation Bank slash interest rates on home, car and educational loans for a limited period of three months. The bank also decided to waive the processing fee for these loans.
Interest rates for Corp Home Housing loan for up to Rs50 lakh is 10.50%. The new rates is 10.75% for loans up to Rs1 crore and 11% for loans exceeding Rs1 crore. The bank was earlier charging 11.25% interest on home loans.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)