A special court for SEBI cases in Mumbai has rejected Nirmal Kumar Kotecha’s plea to settle a market-manipulation prosecution by paying a compounding fee, holding that the alleged offences were serious and affected investors at large.
Special Judge R M Jadhav rejected Kotecha’s application. Kotecha is a key accused in the case, which was filed in 2017 and is still pending before the special court.
The court cited Prakash Gupta Vs SEBI case in which the Supreme Court has observed that if the offence is of public character the non-prosecution of which will affect others at large, it should not be compounded even if restitution has taken place.
SEBI’s complaint accuses Kotecha and others of allegedly manipulating and rigging the price of Pyramid Saimira Theatre Limited (PSTL) shares to make unlawful gains. It also alleges that a forged SEBI letter was used to influence the stock price.
SEBI had consented to compounding the case against Kotecha on payment of around Rs 1.52 crore, including legal costs. The minutes of SEBI’s High-Powered Advisory Committee were also placed before the court.