The Securities and Exchange Board of India (SEBI) on Monday barred the country’s leading real estate developer DLF Ltd and its six top officials, including chairman K P Singh, his son and vice chairman Rajiv Singh and daughter Pia Singh, who is a whole-time director, from accessing the capital market for three years for non-disclosure of legal cases during the company’s initial public offering (IPO) in 2007.
The real estate firm and its six top officials won’t be able to buy or sell shares in the capital market for the next three years. “I find that the 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,” SEBI whole-time member Rajeev Kumar Agarwal said in his 43-page order.
The other DLF officials barred from the market include T C Goyal, managing director, Kameshwar Swarup, executive director (legal) and Ramesh Sanka, CFO. Shares of DLF, which has a market capitalisation of Rs 26,140 crore, fell by 3.71 per cent to Rs 146.70 on the BSE on Monday.
In a statement, the company said, “DLF and its board wish to reassure its investors and all other stakeholders that it has not acted in contravention of law, either during its initial public offer or otherwise. DLF 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. DLF will defend itself to the fullest extent against any adverse findings and measures contained in the order passed by SEBI. DLF has full faith in the judicial process and is confident of vindication of its stand in the near future.” As per SEBI’s rules, it is mandatory for companies to disclose all legal cases in the IPO prospectus. However, DLF, which raised Rs 9,187 crore in 2007, failed to disclose a case involving three of its alleged subsidiaries. SEBI investigated the case relating to DLF’s dealings with some of its allegedly related entities following an order from the Delhi High Court in 2010. According to SEBI, a complaint was filed by a person in 2007 stating that Sudipti Estates Private Ltd and certain other persons had duped him of Rs 34 crore in a transaction related to purchase of land. The complainant, identified as Kimsuk Krishna Sinha, said he had registered an FIR at the Connaught Place police station in New Delhi against Sudipti and others. He said Sudipti had only two shareholders — DLF Home Developers Ltd and DLF Estate Developers Ltd.
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