Real estate major DLF may pay a fine aggregating to the tune of Rs 5 lakh on a per day basis to the Securities and Exchange Board of India (SEBI), following the Delhi High Court’s (HC) dismissal of former’s plea on November 20, as mentioned in a media report. In a big trouble, the fine would be applicable since November 5, as the court dismissed DLF’s plea against SEBI’s decision to probe into the company’s faulty disclosures during its over Rs 9,000-crore initial public offering (IPO) in 2007.
Market regulator issued a summons to DLF to give information and documents, to carry out preliminary investigations as per court order, into the company’s alleged faulty disclosures during its IPO. A probe was directed to be conducted by the Delhi High Court in 2011 after it was alleged by Delhi-based businessman Kimsuk Krishna Sinha that DLF had intentionally made a false statement that it had no association with Sudipti Estates, one of its subsidiaries against which criminal case was filed. Sinha alleged Sudipti, DLF Home Developers and DLF Estate Developers were sister concerns inextricably linked, part of the DLF group.
Further, the company in Draft Red Herring Prospectus (DRHP) filed for a public issue in May 2006, wherein, it mentioned that Sudipti was its associate company but withdrew it later, in a fresh filing in January 2007. In light of criminal case filed, regulator sought for shareholding pattern of Sudipti Estates since 2005 and the company’s other filings with the registrar of companies.