Supreme Court on Friday sought response from real estate major DLF on a Sebi’s plea challenging a tribunal ruling that quashed the markets regulator’s order which banned the company and its six top brass from accessing the capital markets for three years.
Senior counsel Rafiq Dada, appearing for Sebi, told a bench headed by justice J Chelameswar that the SAT order of March 13 was a split verdict, where the judges had ruled in favour of the regulator and reduced the ban on the company and its executives to six months. The bench served notice on the Sebi’s plea to stay the tribunal’s order as the six-months ban is already over. The regulator’s in October had found the company and its executives, including chairman KP Singh, guilty of fraud and concealing material information while filing IPO documents in 2007. The IPO had raised R9,187.5 crore.
While a minority view of the tribunal was in favour of a six-month ban on the developer and officials, a majority of members rejected the proposal. The minority view of presiding officer JP Devadhar was that while Sebi’s stand that DLF resorted to sham transactions for avoiding and concealing material disclosures cannot be faulted, the Sebi investigating officer was also guilty of “gross misconduct and dereliction of duty and failure on his part” in ascertaining if DLF was aware of a first information report filed against the company in April 2007.
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