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SAT quashes Sebi ban on DLF, slams regulator

In a ruling that may set a precedent, the Securities Appellate Tribunal (SAT) on Friday quashed the three-year ban imposed by the Securities and Exchange Board of India (Sebi) on realty giant DLF, its promoters and key executives.

dlf logoThe order was passed by a majority of two while one member dissented calling the ban to be reduced to six months.

The order led to the DLF scrip surging more than 8 per cent on the Bombay Stock Exchange before ending 6 pc higher at Rs 157.50 on Friday.

In the harshest-ever regulatory punishment in the country, Sebi on October 10 last year had barred DLF and six others from the capital markets for three years alleging active and deliberate suppression of material facts during its Rs 9,000-crore-plus IPO more than seven years ago.

In its order on Friday, the SAT ruled that Sebi has completely failed to approach the issue in the matter pragmatically. “Viewed from any angle, the impugned order is like a troubled sea whose waters only cast up mire and dust and, therefore, the same is liable to be quashed and set aside.”

The two members also pulled up Sebi for lapses in its investigation into the case while stating that it was the job of merchant bankers to ensure proper disclosures in IPO documents. The order also said DLF suffered huge losses to the tune of thousands of crores of rupees in its market value after Sebi’s ban.


The order also questioned a “somersault” done by Sebi after seven years of the IPO and said that the entire case is based on a complaint filed by a person with “vested interest”.

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