Sebi moves SC against DLF directors

Appeal challenges relaxation provided by SAT

After moving the Supreme Court against DLF, the Securities and Exchange Board of India (Sebi) has filed an appeal before the apex court against the realty major’s directors, challenging a tribunal order in the matter of violation of disclosure norms during its initial public offer (IPO). The appeal is likely to come up for admission on Monday.

Sebi in an order dated October 10, 2014, had restrained six directors of DLF along with its chief financial officer (CFO) from accessing the securities market for three years. The individual entities named in the Sebi order include Rajiv Singh (vice-chairman), TC Goyal (managing director), Pia Singh (whole time director), Kameshwar Swarup (executive director, legal), GS Talwar (director) and Ramesh Sanka (chief financial officer).

THE STORY SO FAR

• Oct 10, 2014: Sebi passes final order against DLF, barring the company and key executives for irregularities in IPO disclosures
• Nov 5, 2014: SAT allows DLF to access Rs 1,800 crore in mutual fund money
• Feb 26, 2015: The capital makrket regulator imposes Rs 86-crore penalty on DLF, related entities
• Mar 13, 2015: SAT upholds DLF appeal, overturns ban
• Apr 2015: Sebi moves SC against DLF
• Jul 2015: Sebi moves Supreme Court against DLF directors

In March, the Securities Appellate Tribunal (SAT) had quashed the Sebi order stating the case was one of over-regulation by the capital market regulator and had led to a grave miscarriage of justice.

Of the three-member SAT bench, Jog Singh and AS Lamba had favoured quashing the ban, while presiding officer JP Devadhar was in favour of a six-month ban.

Sebi then moved the Supreme Court in April. In the appeal, the regulator had contested several grounds of the SAT order. One such was the observation by the SAT that clearance of the Sebi board was not taken before initiating investigation proceedings. Sebi’s contention was that being a quasi-judicial body, it had powers to act on its own accord.

Sebi’s latest appeal against the relief to directors may hurt DLF’s plans to raise capital to shed debt. The case relates to non-disclosure of certain information by the company during its IPO in 2007 that had garnered about Rs 9,000 crore.