Sebi imposes Rs52-crore penalty on DLF for non-disclosure
26 February 2015
The Securities and Exchange Board of India (Sebi) on Thursday fined property developer DLF Ltd and its top management Rs52 crore as part of a broader probe into the firm's failure to disclose details during its initial public offering (IPO).
The capital markets regulator last year banned the company from raising capital for three years as part of the same case, a verdict which DLF is appealing at a securities tribunal.
Sebi has then concluded that the property developer wilfully withheld details of all of its subsidiaries, as well as details of legal cases pending against those companies when it filed its IPO documents.
DLF had earlier argued before the Securities Appellate Tribunal (SAT) that the market regulator had not followed Fraudulent and Unfair Trade Practices (FUTP) rules while penalising the company.
The SAT was hearing DLF's plea against a Sebi order passed in October, barring the company and its six top executives from securities markets for three years due to non-compliance with disclosure norms during its IPO seven years ago.
In a June 2013 show-cause notice, Sebi accused DLF of "suppressing facts in the IPO offer document to defraud investors".
Sebi had banned DLF, its chairman K P Singh and five other senior-most officials from the market for three years for not disclosing the names of two of its over 250 subsidiaries in the 2007 IPO documents. The company had challenged this ban.
The Sebi action followed a Delhi High Court order to probe Sinha's allegation that a DLF subsidiary, Sudipti Estates, and certain other persons duped him of Rs34 crore in a land deal.