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SAT slams Rs 7,500-cr Sebi blow on DLF

SAT slams Rs 7,500-cr Sebi blow on DLF

After DLF sought interim relief from SAT saying it needs to redeem around Rs 2,000 crore locked in mutual funds and some investment in bonds worth thousands of crores, the tribunal sought Sebi's response by afternoon itself.

DLF chairman K.P. Singh DLF chairman K.P. Singh

The Securities Appellate Tribunal (SAT) asked Securities and Exchange Board of India (Sebi) on Wednesday the reason for banning DLF and its six top executives from the securities markets seven years after the realty major applied for an initial public offering (IPO) in 2007.

After DLF sought interim relief from SAT saying it needs to redeem around Rs 2,000 crore locked in mutual funds and some investment in bonds worth thousands of crores, the tribunal sought Sebi's response by afternoon itself.

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DLF had received shareholders' approval last month to raise up to Rs 5,000 crore through nonconvertible debentures. SAT adjourned DLF's plea and posted the matter for hearing on October 30.

Presiding officer J.P. Devadhar and other SAT members Jog Singh and A.S. Lamba wanted Sebi's response by afternoon itself to consider any interim relief.

Sebi counsel Jamshed Cama said that his client's offices are closed for Diwali holidays. Devadhar observed that Sebi should have envisaged the impact of its regulatory actions on the investors, who have lost more than Rs 7,500 crore following the unprecedented ban,  which was imposed last week.

Cama replied that if DLF were to be believed, they did not disclose information about three subsidiaries (Sudipti, Shalika and Felicite) during the IPO launch arguing that they were of no material value. Sebi also questioned DLF's decision to allow wives of senior executives to remain invested in those companies. Describing the Sebi action as a death warrant and not a ban, senior DLF counsel Janak Dwarakadas said that there was no precedent wherein with one single stroke the watchdog's action, instead of protecting the investors, wiped out Rs 7,500 crore in market capitalisation.

Published on: Oct 24, 2014, 6:13 PM IST
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