Capital markets regulator, Sebi, banned the promoters of Deccan Chronicle Holdings Ltd (DCHL) from accessing the securities market for a period ranging from one to two years and imposed sanctions totaling 8.20 crores of rupees for various violations.
The directives passed against them by order on Tuesday relate to fraudulent activities, an understatement of loans by DCHL in its financial statements for fiscal year 2008-09 to 2011-12 and regulatory violations.
The regulator imposed a fine of Rs 4 crore on DCHL, Rs 1.30 crore each on T. Venkattram Reddy, T. Vinayak Ravi Reddy, Rs 20 lakh on N Krishnan and Rs 10 lakh on V Shankar.
“…prevents T. Venkattram Reddy, T. Vinayak Ravi Reddy, PK Iyer, N Krishnan and V Shankar from entering the securities market and further prohibits him from buying, selling or dealing in securities, directly or indirectly, or to be associated with the securities market for a period ranging from one year to two years,” Sebi said.
The instructions from the Securities and Exchange Board of India (Sebi) follow an investigation by the market regulator between October 2011 and December 2012, in which various breaches of PFUTP (prohibition of fraudulent and unfair trading practices) and regulations on insider trading has been observed.
Pursuant to the investigation, DCHL was found to have under-reported loan amounts, interest payments and finance charges in the company’s books of accounts during fiscal year 2008-09 to 2010-11 and had thus misled investors and shareholders by reporting to the public, these manipulated financial data of the company and transferred outstanding loans to the books of Deccan Chronicle Marketers (DCM).
T. Venkattram Reddy and PK Iyer, as President and Vice President of DCHL, failed to present true and fair financial statements, understated liabilities and overstated profits in the company’s accounts, then in offering to buy back shares at a price that was higher than the prevailing market price of the scrip despite the absence of reserves. They knowingly deceived investors and tricked them into investing in the company’s shares.
Additionally, Reddy, Ravi Reddy, and Iyer have also failed to disclose the encumbrances of the shares they own, created as a result of signing these Non-Assignment Undertakings (NDUs) or pledge agreements with various securities institutions. credit and, therefore, failed to comply with various regulations. .
DCHL and its promoters have kept investors in the dark about their increased shareholding due to the firm’s stock buyback.
The market watchdog noted that misleading information about its business activities and the true nature of its earnings could mislead investors was unfair.
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