Description
SEBI investigation order regarding violations of securities regulations by Decipher Labs Limited and its directors during November 2021 to January 2022.
Summary
SEBI has issued an order against Decipher Labs Limited and its key personnel (Janakiram Ajjarapu, Sushant Mohan Lal, and Kumar Raghavan) following an investigation into violations of securities regulations during November 12, 2021 to January 11, 2022. The investigation covered potential breaches of PFUTP Regulations, PIT Regulations, and LODR Regulations.
Key Points
- Investigation period: November 12, 2021 to January 11, 2022
- Company listed on BSE since 1995, originally in pharmaceuticals, later diversified to IT
- Janakiram Ajjarapu acquired the company in 2017 through open offer
- Company name changed from Combat Drugs Ltd. to Decipher Labs Ltd. in 2020
- Significant changes in shareholding pattern during investigation period
- Promoter holding decreased from 45.94% to 39.01% between September-December 2021
- Public shareholders increased from 12,795 to 39,274 in same period
Regulatory Changes
This is an enforcement action rather than a regulatory change. The order addresses violations of existing regulations including SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations 2003, SEBI (Prohibition of Insider Trading) Regulations 2015, and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
Compliance Requirements
- Listed companies must comply with PFUTP, PIT, and LODR regulations
- Proper disclosure of shareholding changes required
- Directors and key management personnel must adhere to insider trading restrictions
- Company secretaries and CFOs must ensure regulatory compliance
Important Dates
- Investigation Period: November 12, 2021 to January 11, 2022
- Company acquisition by current promoter: 2017
- Company name change: 2020
- Subsidiary formation (ICP Solutions): May 2018
- US subsidiary takeover (Decipher Software Solutions LLC): December 2019
Impact Assessment
High impact enforcement action affecting a BSE-listed company and its management. The investigation reveals significant shareholding pattern changes and potential market manipulation during the investigation period. This could lead to penalties, trading restrictions, or other regulatory sanctions for the company and individuals involved. Investors should monitor further developments and potential impact on share price and trading activity.
Impact Justification
SEBI enforcement action against listed company for multiple regulatory violations including fraudulent practices and insider trading