Tribunal quashes Sebi order against DLF

In a major relief for DLF, the Securities Appellate Tribunal on Friday quashed a Sebi order against the realty giant that had barred the company and its six top executives from capital markets for three years.

Soon after the Tribunal pronounced its order, the shares of DLF soared higher by about 8 per cent. The stock was trading 7.75 per cent up at Rs 160.5 at the Bombay Stock Exchange in early afternoon trade.

"We welcome this order and have full faith in the country's judicial system. We are in the process of studying the order and will comment accordingly," DLF said in a statement after the SAT judgment.

SAT had reserved its order last month on appeals filed by DLF chairman K P Singh and five others, including his son Rajiv Singh and daughter Pia Singh.

The Sebi had passed an order in October last year after finding them guilty of "active and deliberate suppression" of material information at the time of its IPO in 2007.

While that order did not include any monetary penalty, the Sebi passed another directive last month, in the same case, wherein penalties totalling Rs 86 crore (Rs 860 million) were imposed on DLF, its top executives and a host of related persons and entities including spouses of some executives who were "housewives".

The Sebi order passed in October was challenged by DLF the same month before the tribunal. DLF is yet to challenge the second order from Sebi.

In the case, apart from Singh, his son and daughter, 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, were also barred by the Sebi.

After its over four-year-long probe, the Sebi had 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."

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

Last month, the Sebi slapped fines worth Rs 86 crore (Rs 860 million) on DLF, its top executives, their family members and various other related entities for entering into "sham transactions" to mislead IPO investors.