DLF files appeal against regulatory ban

Realty giant DLF on Friday filed an appeal before the Securities Appellate Tribunal (SAT) against a Sebi order barring it and top executives from capital markets.

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

In a major blow to DLF, Sebi has barred the country's largest real estate developer as well as its six top executives, including chairman and main promoter K P Singh,

from the securities market for 3 years for "active and deliberate suppression" of material information at the time of its IPO.

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 Rs 19,000 crore (Rs 190 billion) as on June 30, 2014, while its already-proposed fund raising plans include nearly Rs 3,500 crore (Rs 35 billion) 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 firm and its top promoter/executives from the market.

DLF is the largest real estate group in the country with nearly Rs 10,000 crore (Rs 100 billion) annual turnover.

On Tuesday, the company shares had plunged by nearly 30 per cent, eroding the market value by about Rs 7,500 crore (Rs 75 billion).

However, the stock regained some lost ground in the next trading session.

DLF's IPO in 2007 had fetched Rs 9,187 crore (Rs 91.87 billion) – the biggest IPO in the country at that time.

Besides K P Singh, those barred from the markets include his son Rajiv Singh (Vice Chairman), daughter Pia Singh (Whole Time Director), Managing Director T C Goyal, former CFO Ramesh Sanka and Kameshwar Swarup, who was ED-Legal at the time of the company's public offer in 2007.

On October 13, DLF had said it has not violated any laws and it would defend its position against any adverse findings in the Sebi order.

"DLF has full faith in the judicial process and is confident of vindication of its stand in the near future," the statement had said.

After its over four-year-long probe, Sebi found that a "case of active and deliberate suppression of any material information so as to mislead and defraud the investors in the securities market in connection with the issue of shares of DLF in its IPO is clearly made out in this case".

In his 43-page order, Sebi's Whole-Time Member Rajeev Agarwal also said that violations are grave and have larger implications on safety and integrity of the securities market.