V. Shankar Vs SEBI (SAT Mumbai)
The Securities Appellate Tribunal (SAT), Mumbai bench, on May 5, 2025, delivered a significant order in the case of V. Shankar vs. Securities and Exchange Board of India (SEBI). This order pertains to an appeal filed by V. Shankar against an order passed by the Adjudicating Officer (AO) of SEBI on March 22, 2022. The AO’s order had imposed a penalty of ₹10 lakhs on V. Shankar under Section 15HA of the SEBI Act, 1992, for alleged violations of Sections 68 and 77A of the Companies Act, 1956, read with Regulations 3 and 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations), and Section 12A of the SEBI Act, in connection with a buyback of shares by Deccan Chronicle Holdings Limited (DCHL). The matter dates back to 2011 when DCHL had came with a buyback offer, whose public announcement was signed by Mr V. Shankar as Company Secretary and Compliance Officer.
The crux of the matter revolves around the role and responsibility of a Company Secretary in ensuring the accuracy and compliance of financial statements and public announcements made by a company, particularly concerning a share buyback. The primary issue before the SAT was whether V. Shankar, being the Company Secretary of DCHL at the relevant time, could be held liable for the alleged misstatements and non-compliance in the buyback offer made by the company?
