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The Securities Appellate Tribunal (SAT) on Tuesday admitted the plea of DLF’s promoters against a Securities and Exchange Board of India (Sebi) order that had barred the real estate major and related entities from accessing capital markets.
DLF promoters including KP Singh, his children – Pia Singh and Rajiv Singh and two other key management personnel — DLF Managing Director T C Goyal and former managing director Ramesh Sanka had approached SAT for relief against the Sebi order.
All the petitions, including the one filed earlier by DLF, will now be clubbed together. SAT has asked Sebi to file any replies it has to the new petitions by December 6, and petitioners have been asked to provide any additional information required by December 8. The tribunal will hear the appeal of the company and its promoters together on December 10.
Sebi in an order dated October 13 had passed a prohibitory order against the company and other entities for active and deliberate suppression of material information to mislead and defraud securities market investors in connection with the issue of DLF shares in its initial public offer.
The company had raised Rs 9,187 crore through an initial public offering (IPO) in 2007. The entities involved were barred from accessing the securities market for three years.
The matter relates to one Kimsuk Krishna Sinha who had filed two complaints in June 2007, naming a DLF subsidiary in a land deal that resulted in him being duped of around Rs 34 crore. Sinha subsequently moved court in the matter. The judiciary in turn passed an order asking Sebi to examine the matter in April 2010. A stay was obtained in July 2010, which was revoked the next year. Sebi began investigating the matter subsequently and found that DLF had sought to dissociate itself from the subsidiary company, and two other entities, through ‘sham’ transactions.
The stock market regulator noted that DLF had not made disclosures about the three companies and related party transactions in which they were involved. The regulator also said that the case filed by Sinha against the DLF subsidiary was material information which should have been shared with investors at the time of the IPO.
SAT earlier this month had given interim relief to the company in a separate appeal filed by DLF and allowed it to redeem mutual fund investments worth Rs 1,806 crore to service loans of self and subsidiaries.
