Description

SAT has stayed SEBI's market access restriction on Decipher Labs Ltd, allowing the company to continue securities market activities while appeal is pending.

Summary

NSE has issued a circular updating members on the Securities Appellate Tribunal (SAT) stay order regarding SEBI’s directions against Decipher Labs Ltd. SAT has stayed paragraph 105(a) of SEBI’s original order dated July 31, 2025, which had restrained Decipher Labs Ltd from accessing securities markets for 1 year. The stay allows the company to continue market activities while the appeal (Appeal No. 421 of 2025) is pending.

Key Points

  • SEBI originally restrained Decipher Labs Ltd (PAN: AAACC8372L) from accessing securities market for 1 year via Order No. QJA/SS/IVD-2/ID18/31578/2025-26 dated July 31, 2025
  • SAT vide order dated September 16, 2025 in Appeal No. 421 of 2025 granted stay of the market access restriction at paragraph 105(a)
  • Appellants (Mr. Janakiram Ajjarapu & Ors.) agreed to deposit 50% of disgorgement and penalty amount within four weeks
  • Appellants Nos. 1 and 2 permitted to sell shares from demat account to comply with payment order
  • No coercive action to recover disgorgement and penalty subject to 50% deposit in interest bearing account
  • SEBI has communicated compliance with SAT’s stay directions
  • Consolidated list of debarred entities available at NSE website

Regulatory Changes

The SAT stay order effectively suspends SEBI’s prohibition on Decipher Labs Ltd from:

  • Accessing the securities market
  • Buying, selling or dealing in securities (including mutual fund units)
  • Being associated with securities market in any manner

This suspension remains in effect during the pendency of the appeal proceedings.

Compliance Requirements

  • NSE members must take note of the SAT stay order and ensure compliance
  • Members should refer to consolidated list of debarred entities on NSE website for updated information
  • Appellants must deposit 50% of disgorgement and penalty amount within four weeks from September 16, 2025
  • Members can contact NSE Investigation Department at dl-invsg-all@nse.co.in for queries
  • Updated list available at: https://www.nseindia.com/regulations/member-sebi-debarred-entities

Important Dates

  • July 31, 2025: SEBI issued original order restraining Decipher Labs Ltd
  • August 01, 2025: NSE circular no. NSE/INVG/69458 communicating SEBI order
  • September 16, 2025: SAT granted stay of paragraph 105(a) of SEBI order
  • October 31, 2025: Current NSE circular updating members on SAT stay
  • December 01, 2025: Next hearing date for Appeal No. 421 of 2025
  • Four weeks from September 16, 2025: Deadline for 50% deposit of disgorgement and penalty

Impact Assessment

Market Impact: The SAT stay order allows Decipher Labs Ltd to resume normal securities market operations, removing the 1-year market access ban. This enables the company to develop its business and participate in trading activities during appeal proceedings.

Operational Impact: The stay provides significant relief to Decipher Labs Ltd and associated entities by permitting continued market participation. However, partial payment of disgorgement and penalty amounts is required, with appellants permitted to liquidate shares to meet this obligation.

Regulatory Significance: This case demonstrates the appellate process for challenging SEBI orders and the tribunal’s willingness to grant interim relief based on business development considerations, subject to partial financial compliance. The outcome will be determined at future hearings, with next date scheduled for December 1, 2025.

Impact Justification

SAT stay of SEBI debarment order significantly impacts market access restrictions for Decipher Labs Ltd and involved entities, allowing continued market participation during appeal proceedings.