SC declines Sebi plea against DLF units’ stake sale

The Supreme Court on Wednesday declined market regulator Sebi’s plea to restrain three subsidiaries of real estate giant DLF from selling shares worth `12,000 crore to reduce its debt.

A bench headed by Justice J Chelameswar said it shall not pass any interim order against the company.

Senior advocate CU Singh sought the temporary restraint order against the DLF units selling their shares to offshore entities. He said the company should not be allowed to trade, as the top court was already hearing a Sebi plea against the appellate tribunal’s order on DLF. The latter had set aside a Sebi decision to bar DLF and its key directors, including promoter KP Singh, from accessing the market directly or indirectly.

The advocate argued that the stake sale would affect the regulator’s appeal. When the bench expressed reluctance, Singh asked the court to order that the sale be made dependent on the outcome of the court case on the main appeal. “That’s obvious. Anything done in the pendency of the case will be subject to the final order in the appeal,” the bench said. It also wondered if a subsidiary’s action could be attributed to the holding company. The bench did not dismiss Sebi’s application and listed it for hearing, along with its appeal. Sebi had last year declared DLF and six of its executives, including chairman KP Singh, guilty of fraud and concealing material information during its public issue in 2007, in which the company raised `9,187.5 crore. Subsequently it issued orders against the guilty.