Only one complaint on disclosures: DLF

At SAT, real estate major counters the Sebi claim that DLF was barred from capital markets after multiple complaints

Real estate major DLF on Monday said there was only one disclosure-related complaint against it, an issue over which the Securities and Exchange Board of India (Sebi) barred it from the capital markets for three years.

The company mentioned this during a hearing of its appeal against the Sebi order at the Securities Appellate Tribunal (SAT). At an earlier hearing, Sebi had said it had received multiple complaints against the company. But the counsel for DLF on Monday said only one of those was related to disclosures. 

Sebi had also said 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 counsel for the real estate major argued this need not necessarily mean that DLF continued to exert control. “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,” the counsel 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.