Capital markets regulator Sebi has banned the promoters of Deccan Chronicle Holdings Ltd (DCHL) from the stock market for a period of one to two years in addition to imposing total penalties of Rs 8.20 crore for various violations.
The directives issued against them through Tuesday’s injunction relate to fraudulent activities, understatement of loans by DCHL in its financial statements for the 2008-09 to 2011-12 fiscal year and violations of regulations.
The regulator imposed a fine of Rs 4 crore on DCHL and Rs 1.30 crore each of T.Venkattram Reddy and T.
“…T. prevents with the stock market over a period of one to two years.”
The Securities and Exchange Board of India (SEBI) guidance follows an investigation conducted by the market regulator between October 2011 to December 2012 in which various violations of PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) and Insider Trading Regulations were found.
According to the investigation, DCHL was found to have underreported loan amounts, interest payments and financial charges in the company’s books of accounts during the 2008-09 to 2010-11 fiscal year and thus misled investors and shareholders by reporting to the public such manipulated financial statements of the company and the transfer of outstanding loans. In the books of Deccan Chronicle Marketers (DCM).
T. Venkattram Reddy and PK Iyer as Chairman and Vice Chairman of DCHL failed to provide true and fair financial statements, understated liabilities and overstated profit in the company’s accounts and then by offering to repurchase shares at a price that was above the dominant market price of the stock despite From no reserves. They deliberately deceived the investors and incited them to invest in the company’s shares.
Moreover, Reddy, Ravi Reddy, and Iyer also failed to disclose their share burdens, which were created based on the signing of pledges of non-disposition (NDU) or pledge agreements with various lending institutions, and thus, failed to comply with various regulations.
DCHL and its promoters have kept investors in the dark about the increase in their stakes due to the company’s stock buyback.
The Market Supervisory Authority noted that misinformation regarding its trading activities and the true nature of its income might mislead investors was unfair.
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