The Securities and Exchange Board of India has barred realty major DLF and six key executives, including chairman K.P. Singh, from accessing the capital markets for three years for alleged non-disclosure of certain key information in its red herring prospectus.
The regulator said the company had failed to disclose material information on an FIR filed against one of its subsidiaries and share transfer between related entities in its RHP while coming out with an IPO in 2007.
The regulator alleged the process of share transfer by DLF in three subsidiaries (Sudipti, Shalika, Felicite) was through sham transactions.
SEBI said the noticees (DLF and its executives) employed a plan, scheme, design and device to camouflage DLF’s association with its three subsidiaries.
In this case under such plan, scheme, design and device, the regulator said that DLF and its executives suppressed several material information in the RHP and actively concealed the FIR against Sudipti and others.
“They failed to ensure the RHP/prospectus contained all material information which is true and adequate, to enable the investors to make an informed investment decision in respect of the issue.” “The violations found in this case are grave and have larger implications on the safety and integrity of the securities markets,” Sebi said in a 43-page order.