SAT adjourns DLF hearing to December 18

The real estate major has appealed against a Sebi order barring it from securities market for three years

The Securities Appellate Tribunal (SAT) has adjourned an appeal by real estate major DLF to December 18. The appeal relates to a Securities and Exchange Board of India (Sebi) order barring it from the securities market for three years.

The tribunal had on Wednesday dismissed an intervention petition by Kimsuk Krishna Sinha, who wanted to be made a party in the case. Sinha claimed that it was on his complaint that the Sebi had issued the order. He said the regulator had not heard him during its investigation.



Sinha alleged that he was duped of Rs 34 crore in a land deal involving a DLF subsidiary.  Sebi found that DLF had not disclosed about the dispute when it came out with its Rs 9,187 crore initial public offer (IPO) in 2007. It had also failed to disclose information about its subsidiaries.

In the hearing on Thursday, the DLF counsel said the company had set up three subsidiaries — Sudipti Estates, Shalika and Felicite — to acquire land in Gurgaon.



The counsel said it was an industry practice to buy land assets through subsidiaries to prevent artificial rise in land prices and to keep competitors at a bay. On the omission of this information from the offer documents, the counsel led by Janak Dwarkadas clarified that the company had mentioned the subsidiaries in documents originally filed in 2006. However, this information was removed in the second set of documents filed in 2007 because the subsidiaries had by then completed the land transfer to DLF-related enterprises.

The DLF counsel will continue its arguments on December 18, after which the Sebi will present its case.

Earlier, the tribunal had allowed the redemption of Rs 1,806 crore worth of DLF investments in mutual funds. Asset managers had declined to allow redemption citing the Sebi order, which barred dealing in all securities. Mutual funds also fall under the definition of securities.

The regulator had also barred DLF Chairman K P Singh, son Rajiv Singh (vice-chairman), daughter Pia (whole-time director), DLF Managing Director T C Goyal, former executive director (legal) Kameshwar Swarup and former MD Ramesh Sanka.

Shares of DLF ended down 2.4 per cent to close Rs 156 on Thursday. The Sensex was down 0.8 per cent and ended the day at 27,602.01.