Sebi slaps 3-year ban on DLF, top brass from capital markets

DLF and its six top executives, including chairman KP Singh, his son and vice-chairman Rajiv and whole-time director and daughter Pia, have been barred by Securities and Exchange Board of India (Sebi) from the securities markets for three years after finding the realty major guilty of active and deliberate suppression of material information at the time of its initial public offering (IPO) in 2007. DLF had raised Rs 9,187 crore through the IPO.

"I am satisfied that the violations as found in this case are grave and have larger implications on the safety and integrity of the securities market. It, therefore, becomes incumbent to deal with contraventions, digression and demeanour of the erring Noticees sternly and take appropriate actions for effective deterrence," Sebi's whole-time member Rajeev Agarwal said in his 43-page order dated October 10 but released on Monday.

The company and its top executives are found to have violated various regulations, including Sebi's Disclosure and Investor Protection (DIP) Guidelines and the Prevention of Fraudulent and Unfair Trade Practices norms. As per the order, those facing the ban include TC Goyal (managing director), Kameshwar Swarup and Ramesh Sanka.

About GS Talwar, who was also a non-executive director, Sebi said that it could not be established whether he was involved in dayto-day operations of the company and therefore it gave him the benefit of doubt.

Sebi began its probe after a Delhi High Court order in April 2010, wherein the regulator was asked to undertake an investigation into the complaints made by one Kimsuk Krishna Sinha, who had also filed complaints with Sebi in 2007.

Sebi said that the process of share transfer of three subsidiaries of DLF in Sudipti, Shalika and Felicite was through sham transactions and they employed a plan, scheme, design and device to camouflage the association of DLF with these three entities.

Sinha alleged that Sudipti and certain other persons had duped him of about Rs 34 crore in relation to a transaction between them for purchase of land and he had registered an FIRin April 2007 against Sudipti and others.