Sebi order like capital punishment: DLF counsel argues

The Securities Appellate Tribunal (SAT) adjourned the hearing of real estate major DLF after arguments were heard in the first session on Thursday.

The appeal is set to continue in the afternoon. The tribunal hears appeals against decisions of the stock market regulator.

During the appeal, the counsel for DLF argued that the regulator's order was akin to capital punishment, a penalty which should not have been passed unless the offence was of an extreme nature. "This is certainly not one of the rarest of rare cases, " he said.

The Securities and Exchange Board of India (Sebi) had passed an order prohibiting the company and its officials from accessing the capital market or dealing in securities in any way for a period of three years.

Even mutual funds had refused to allow redemptions by the company as mutual fund units are technically 'securities'. This was later allowed after the company moved SAT.

The order was in relation to disclosures the company made during its initial public offer (IPO). An IPO is when a company's shares are sold to the public for the first time. DLF had raised over Rs 9,000 crore through its share sale

However, it had failed to disclose to investors a complaint by one K Sinha. He had alleged that a DLF-linked company had been involved in a land deal with him. He said that he was duped of over Rs 30 crore in the deal.

Sinha had also sought to be included in the appeal against the order. His lawyer had argued that Sebi had not given him a hearing before passing the order despite being the original complainant. SAT, during the previous hearing, turned down the petition to allow such intervention.

Securities and Exchange Board of India ( SEBI )

DLF Ltd