Supreme Court on Wednesday refused to stay realty major DLF's plans to raise around R12,000 crore by selling stakes in its rental properties.
The Supreme Court on Wednesday refused to stay realty major DLF’s plans to raise around R12,000 crore by selling stakes in its rental properties.
The order came on a fresh plea by market regulator Sebi seeking a stay on transfer of shares by DLF’s subsidiaries to an overseas entity. In October, DLF had said that its board had approved plans to sell 40% stake in the company’s rental business (DLF Cyber City Developers) to institutional investors to reduce its debt.
While a bench headed by Justice J Chelameswar declined immediate relief to Sebi, it did not dismiss its fresh plea and posted it along with its main appeal, pending before the apex court, which has challenged the SAT’s March 13 order that quashed the three-year ban on the realty major and its top brass.
Senior counsel CU Singh, appearing for Sebi, argued that the stake sale would affect the main appeal pending before it. He said since the Sebi order specified that DLF cannot access the market or deal in securities either directly or indirectly, the move to sell stakes in its rental properties amounted to indirect access.
The court said it was not going to impose any prohibition on the activities of the company and “anything done in the pendency of the case will be subject to the final order in the appeal”.
The bench further said that a corporate body could have different functions, and asked if a subsidiary’s action could be attributed to the holding company.
Sebi had last year imposed a ban on DLF and six of its executives, including chairman KP Singh, his daughter Pia Singh, and vice-chairman Rajiv Singh, from accessing the securities market for allegedly misleading investors by withholding information in its 2007 IPO prospectus, in which the company raised R9,187.5 crore.