While Kotecha was was not reachable, P S Saminathan, managing director of Pyramid Saimira, confirmed this and said that Kotecha was in no way connected to the company now.
"He (Kotecha) is neither a director nor a personality connected with the company," said Saminathan. Kotecha diluted the stake at a time when Pyramid was the target of a serious fraud wherein the company was sent a forged letter of the Securities and Exchange Board of India (Sebi), asking Saminathan to make an open offer to minority shareholders.
The company announced that Sebi had asked Saminathan to make an open offer to acquire 20 per cent of the shareholding at a price of Rs 250 per share, more than four times the ruling market price.
Later it was found that the market regulator had not sent any such advisory and the letter was forged. The matter is still under investigation and the investigation agency arrested Rakesh Sharma, who is believed to be the person circulating the letter to the media.
Kotecha diluted his stake in more than four to five transactions during the current month, the last time on January 2. Kotecha had brought down the shareholding to 15.48 per cent from 24.89 per cent in September 2008.
He had sold 9.4 per cent stake in the company through a mix of inter-se transfer to the co-promoter Saminathan, besides market sales.
It may be recalled three days back had reduced his holding by 6 per cent to 17.98 per cent from 24.45 per cent as on December 5.
Saminathan, who holds 5.09 million shares or 17.99 per cent in the company, said that he will increase his stake to 50 per cent before March 2009.
The promoter had sold 7 million shares, or 6.04 per cent, between December 20 and 31, while Uma Saminathan, another promoter, sold 152,839 shares, or 0.27 per cent, in the three months to December.
"This is the peak season in south India for film releases and confirmations, the firm hopes its locked-in money will be released, easing the cash crunch. Hence, we have decided to transfer certain shares and requested financial institutions to sell the same for short-term loans that the company had taken," he said.
Police grill Kotecha in fake letter case
Palak Shah in Mumbai
Nirmal Kotecha was questioned by the Mumbai police on Tuesday in a case involving forgery of a letter involving Sebi. The letter, purportedly from the corporate finance department of Sebi, was addressed to P S Saminathan, chairman of Pyramid Saimira, and was distributed to the media on December 20.
The letter was written on Sebi's letterhead and had a file number that gave the impression that it was sent out by the regulator. Among other issues, the letter asked Saminathan to explain why he had announced an open offer for 20 per cent of Pyramid Saimira stake at Rs 200 per share when the market price of the stock was Rs 60.
The letter also asked the promoter to make an open offer to acquire 20 per cent of shares held by the public at Rs 200.
The market regulator later said the letter was forged after markets reacted to the media reports and the stock price zoomed for two days.
Kotecha was was called in for questioning by the Bandra-Kurla Complex (BKC) police station after one of the arrested persons who was earlier working for a Mumbai-based public relations firm named him as the source. Nissar Tamboli, deputy commissioner of Police (DCP), zone VIII, said, "We questioned Kotecha as his name cropped up during investigations. We would reveal the name of all the conspirators and soon file a chargesheet."
The investigating officer of the case, Raksha Maharao, however, said the police have not able to ascertain Kotecha's role in the case.
Sources familiar with the developments said Sebi, which is also carrying out a parallel investigation in the case, may also call Kotecha for questioning.
Kotecha could not be reached for comments.