Reconsider decision on role of company secretary in violation of regulatory provisions: SC to SAT
The Supreme Court of India in its recent order asked the Securities Appellate Tribunal (SAT) to reconsider its decision on the responsibilities and liabilities of a company secretary (CS) in terms of various statutory regulations related to buyback of securities while setting aside the SAT's ruling that exonerated V Shankar, the CS of Deccan Chronicle Holdings (DCHL), from liability for certain misstatements and incorrect disclosures made by the company.
The CS of DCHIL was KMP of the company during 2009-10 and 2010-11 and it was held liable for violation of regulatory provisions by the company in a share buy-back offer worth Rs. 270 cr. It was emphasised that that as a ‘statutory official’ of the company, he should have exercised due diligence and checked the veracity of the buyback offer documents and legal compliance before authenticating them and signing the public announcement which was found to have violated the provisions of the Companies Act, 1956.
