DLF appeal against Sebi ban adjourned to Tuesday

SAT adjourns hearing to Tuesday

During a hearing of its appeal against a Securities and Exchange Board of India (Sebi) order banning it from the capital markets for three years, at the Securities and Appellate Tribunal (SAT), real estate major DLF on Monday said only one of the complaints Sebi had received against it was related to disclosures.

Janak Dwarkadas, senior advocate and counsel for DLF, was countering the regulator’s earlier claim that the action had been taken after receiving multiple complaints against the company. SAT adjourned hearing of the appeal to Tuesday.

Sebi had barred DLF and some of its executives from the capital markets for three years over disclosure-related issues.

Sebi had also suggested that continuation of the same members on the board of a subsidiary involved in the complaint, even after DLF sold its stake in it, indicated the subsidiary was still part of the DLF group. The DLF counsel argued this need not necessarily mean that DLF continued to exert control over such an entity. “If a Reliance subsidiary is sold to Tata... (but the directors are retained, it cannot be that the company is now) ...a subsidiary of both,” he said.

SAT is the body that hears appeals against the stock market regulator, and takes a final decision after considering arguments from both sides (such as those mentioned above).

In this case, DLF has appealed against a Sebi order barring it and six of its top officials from accessing the capital market for three years, on the ground that the company failed to disclose to the public, at the time of its initial public offering, a police complaint filed against one of its subsidiaries. DLF had raised Rs 9,187 crore from its IPO in 2007.

In the complaint on which the order was based, one K K Sinha had alleged he had been duped of Rs 34 crore in a land deal involving a DLF subsidiary.