The investigation in Pyramid Saimira brings to light the role of investment banker Keynote Capital. The Pyramid Saimira scam raises a questions mark on the so-called "Chinese Wall" claimed by many investment managers between their broking, advisory and investment banking arms. In this case, the Securities and Exchange Board of India (Sebi) pulled up Keynote Capital, the lead manager to the Pyramid Saimira's initial public offering (IPO), for issuing questionable trade recommendations on the Pyramid stock. It has prohibited Keynote from giving any trade recommendations for any listed company till further directions.
Keynote Capital's report dated February 5, 2008 maintained a "Buy" on Pyramid with 13-month target price of Rs 1,074, when the market price was around Rs 408. On August 5, 2008, Keynote reduced 18-month target price to Rs 285, when the market price of the stock was around Rs 163. Sebi says that Keynote's research team had not published any other media or entertainment industry sector report since November 2004. Keynote Capital also advised Pyramid in raising USD 90 million via foreign currency convertible bonds (FCCBs) and in the acquisition of Dimple Cine Advisors. Sebi says Keynote's involvement in Pyramid Saimira's fund raising and acquisition plans and offering aggressive price targets suggest that it intended to facilitate fraudulent transactions at inflated prices. Sebi also unearthed cross deals by Keynote Capital on behalf of Nirmal Kotecha and PS Saminathan involving 4.85% of the equity. The transaction involved ficticious deals where PS Saminathan acquired stake from Kotecha at Rs 250 per share. However, the deal never involved money changing hands. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
