Deccan Chronicle stock hits record low amid reports of cheating allegations

The shares of Deccan Chronicle Holdings Ltd (DCHL) hit the 10 per cent lower circuit on the Bombay Stock Exchange on Wednesday and closed at a record low of Rs 13.95 apiece amid reports of cheating allegations against the promoters levied by the Hyderabad-based Karvy Stock Broking.

Since July 20, the company’s stock has lost nearly 50 per cent of its value.

Karvy Stock Broking lodged a criminal complaint against the DCHL promoters on the manner in which certain share-pledging transactions were done. Based on the complaint, the police registered a case against the promoters under Sections 420 (cheating), 468 (forgery for the purpose of cheating), 406 (criminal breach of trust) and 471 read with 34 (using as genuine a forged document, acts done by several persons in furtherance of common intention) of the Indian Penal Code.

The complaint alleged a letter purported to have been written by the promoters, with a confirmation of shares available in the depository accounts of the company held by them, was forged.

When contacted, a Karvy spokesperson refused to disclose the details of the complaint. “It has come to our notice that incorrect information has been provided by these customers as also instances of misuse of documents. Based on these facts, Karvy Stock Broking has filed a complaint with the police,” a media note sent by Karvy said.

The contents of the FIR suggested it was a case of pledging of the same shares with multiple agencies. That was done by Karvy (which holds three depository accounts of the company) allegedly at the behest of DCHL promoters, while acting in good faith.