DLF files appeal against SEBI order

Moneylife Digital Team 17 October 2014

DLF has filed an appeal with the Securities Appellate Tribunal –SAT against the ban, imposed by SEBI, on tapping capital markets for three years

DLF Ltd on Friday filed an appeal before the Securities Appellate Tribunal (SAT) against an order issued by Securities and Exchange Board of India (SEBI) barring the real estate company and its promoter, directors and top executives from capital markets.

The appeal is likely to be heard by SAT next week.

In a major blow to DLF, SEBI on Monday barred DLF and its directors including promoter KP Singh for failure to make appropriate disclosures in its prospectus at the time of its second IPO in 2007.

While the regulator did not impose any monetary penalty, the prohibition has barred DLF and the six persons, from any sale, purchase or any other dealings in securities markets for a period of three years, including for raising funds.

DLF had debt of more than Rs19,000 crore as on 30 June 2014, while its already-proposed fund raising plans include nearly Rs3,500 crore through issue of certain bonds to replace its costlier debt.

This was one of the rare orders by SEBI where it has barred a blue-chip company and its top promoter and executives from the market.

DLF is the largest real estate group in the country with nearly Rs10,000 crore annual turnover.

DLF's IPO in 2007 had fetched Rs9,187 crore -- the biggest IPO in the country at that time.

The current action of SEBI stems from a complaint filed by a Delhi-based businessman. In 2007, Kimsuk Krishna Sinha, had alleged that DLF and its directors and agents had lured and compelled him to transfer certain plots of land and did not fulfil the promise of developing the land and providing him higher returns. Other than KP Singh, who is the executive chairman of DLF, SEBI barred Rajiv Singh, vice chairman and son of KP Singh, TC Goyal, managing director, Pia Singh, whole time director and younger daughter of the DLF chief, Kameshwar Swarup, executive director for legal, GS Talwar, director and son-in-law of KP Singh and Ramesh Sanka, chief financial officer (CFO) of DLF.

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