In a major blow to real estate developer DLF Ltd, the capital market watchdog, Securities and Exchange Board of India (Sebi), on Monday barred the company and six of its top management executives, including chairman KP Singh and vice-chairman Rajiv Singh, from the securities market for three years.
The ban comes after Sebi investigations found the key management guilty of suppressing facts and non-disclosure at the time of DLF's initial public offer in 2007.
Among the other executives barred from securities markets include its managing director TC Goyal, whole-time director Pia Singh, CFO Ramesh Sanka and executive director Kameshwar Swarup.
The ruling was in connection with irregularities and disclosure errors the company made in its 2007 initial public offer.
DLF had raised Rs9,187 crore through the IPO route, but had not disclosed the names of associate companies against which a case of fraud was filed, Sebi had noted in an earlier ruling.
“I find that the case of active and deliberate suppression of any material information so as to mislead and defraud the investors in the securities market in connection with the issue of shares of DLF in its IPO is clearly made out in this case,” Sebi's whole-time member Rajeev Agarwal said in his 43-page order.
"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.
"In my view, for the serious contraventions as found in the instant case, effective deterrent actions to safeguard the market integrity. It, therefore, becomes incumbent to deal with contraventions, digression and demeanour of the erring Noticees sternly and take appropriate actions for effective deterrence," Agarwal said.
The company and its top executives were found to have violated various regulations, including Sebi's Disclosure and Investor Protection (DIP) Guidelines and the PFUTP (Prevention of Fraudulent and Unfair Trade Practices) norms.
—With agency inputs
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