SAT Sets Aside SEBI Penalty Against Deccan Chronicle

The Securities Appellate Tribunal set aside on Thursday a SEBI order levying a penalty on Deccan Chronicle Holdings Ltd. for allegedly misrepresenting its books and deceiving its investors.

The SAT also reduced the Securities and Exchange Board of India's penalty on the promoters of the company from Rs 1.3 crore to Rs 65 lakh, while affirming some of the regulator's findings against them. 

In March 2022, SEBI barred DCHL promoters T Venkattram Reddy, T Vinayak Reddy and PK Iyer from the securities market for one to two years for violating various provisions of the Prohibition of Fraudulent and Unfair Trade Practices and insider trading regulations between October 2011 and December 2012. It levied a penalty of Rs 4 crore on DCHL and Rs 1.3 crore each on the three promoters.

The news daily underreported the loan amounts, interest payments and financial charges in its books from 2008–09 to 2010–11 to mislead its investors. It understated its liabilities and overstated its profit, and later offered to buy back the shares at a price higher than the market price, only to deceive its investors, according to the market regulator.

SEBI also found that the promoters and directors had fraudulently pledged the company's shares without adequate disclosures. The market watchdog had said it was unjust to put investors in the dark by providing false information about the company's business operations and actual revenue source.