Securities Appellate Tribunal (SAT) on Monday asked DLF to submit correspondence it had with merchant bankers, auditors and market regulator at the time of its initial public offering (IPO) in 2007. SAT has adjourned the hearing for Tuesday.
Sebi senior counsel Rafique Dada said that realty-major had allegedly created multiple layers to reduce the possibility of tracing any wrongdoings and cited the example of Shalika Estate Developers as a shell entity. Dada also clarified that Sebi acted on several complaints from investors, and did not solely rely on the charges filed by Kimsuk Krishna Sinha.
On Friday, DLF senior counsel Janak Dwarkadas had challenged the motive of Sebi investigation into the matter and maintained that no investor had filed complaints against DLF. “When no investor has complained against DLF, what is Sebi protecting?” Dwarkadas said.
The same day, the Supreme Court (SC) had ruled that KK Sinha be made party to the proceedings between Sebi and DLF in the tribunal. Sinha approached the apex court after SAT rejected his intervention application last week, despite claims that he was the original complainant against DLF.
On October 10, Sebi had barred DLF and its six top officials including chairperson KP Singh from accessing and otherwise buying, selling or dealing in securities for a period of three years for non-disclosure of “material information” and related party transactions between parent and subsidiary company in its draft red-herring prospectus (DRHP).
The troubled real estate developer moved SAT on October 17, challenging the three-year ban.
On November 5, the tribunal granted an interim relief to DLF and allowed the company to redeem Rs 1,086 crore of funds locked in mutual funds towards payment of loan instalments and interest. The tribunal will decide if the company will be allowed to raise Rs 5,000 crore in non-convertible debentures (NCDs).