DLF moves SAT against Sebis order on ban from capital markets

Written by fe Bureau | Mumbai | Updated: Oct 18 2014, 08:12am hrs
Troubled real estate developer DLF has moved the Securities Appellate Tribunal (SAT) challenging a Securities and Exchange Board of India (Sebi) order banning the company and its six senior officials from capital markets, the company said in a stock exchange filing on Friday. The tribunal will hear DLF's appeal on October 22.

In a 43-page order on October 10, the market regulator barred the firm, its chairman and promoter KP Singh and five key executives from dealing in the securities market for three years, for allegedly hiding material information on its subsidiaries and legal cases against them in its IPO prospectus in 2007.

This was after the

market regulator issued

a showcause notice in June 2013.

As a result, DLF shares tanked nearly 30%, eroding the real estate giant's market value by about Rs 7,500 crore in the last one week.

In response, DLF on October 13 said the company 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 has full faith in the judicial process and is confident of vindication of its stand in the near future, the statement had said.

The prohibition means DLF and its six key executives can neither tap the equity capital markets, nor engage in buying or selling activities and equity fund-raising exercise for capital expenditure or debt reduction.

DLF, which owed lenders Rs 21,350 crore as on December 31, 2012, had sold off three of its non-core assets a premium land parcel in central Mumbai's Lower Parel, luxury hotel chain Aman Resorts and its wind energy business picking up Rs 4,889.2 crore.

The Gurgaon-based realty major raised Rs 1,863 crore through an institutional placement programme (IPP) in May last year to comply with the Sebi norm of minimum 25% public shareholding in listed companies.

As of June 2014, DLF's debt stood at over Rs 19,000 crore. Its already proposed fund-raising plans include nearly Rs 3,500 crore through issue of certain bonds to replace costlier debt.