SAT quashes SEBI's restraint order on DLF Ltd

In a 2:1 majority decision given on Friday, the Securities Appellate Tribunal (SAT) quashed the Indian market regulator's order restraining the capital market access on realty major DLF Ltd and its executives.

"The respondent (Securities and Exchange Board of India) has completely failed to approach the issue in the matter pragmatically. Viewed from any angle, the impugned order is like a troubled sea whose waters only cast up mire and dust and, therefore, the same is liable to be quashed and set aside. Ordered accordingly," SAT ordered in favour of DLF and its officials.

The stock price of DLF at the BSE went up to Rs.162 during the day before closing at Rs.157.50, up from the previous close of Rs.148.95.

Last year, the SEBI had barred DLF and six of its executives, including chairman K.P. Singh, from participating in capital markets for three years for acting to "mislead" investors on the company's public offer.

Those prohibited from the markets include the chairman's son and vice-chairman Rajiv Singh, and daughter Pia Singh, who is whole-time director. Others barred were managing director T.C. Goyal, Kameshwar Swarup and Ramesh Sanka.

SEBI said the executives had violated various regulations including SEBI's Disclosure and Investor Protection (DIP) Guidelines and the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) norms.

The regulator's DIP guidelines require that the initial public offer (IPO) prospectus contain all material information which shall be true and adequate so as to enable investors to make informed decisions on investing in the issue.

DLF had raised Rs.9,187 crore through the IPO in 2007.

Reacting to SAT order, DLF Ltd, in a statement, said it is yet to receive the judgment but noted the company and its board were guided by and acted on the advice of eminent legal advisors, merchant bankers and audit firms while formulating its offer documents in 2007.

"We have full faith in the judicial system and we always abide by its order," the statement added.