The Delhi High Court has directed stock market regulator Sebi to conduct probe against real estate giant DLF for alleged mis-statement in its Red Herring Prospectus for its IPO in 2007.
The court passed the order after it was alleged by a person that the DLF had intentionally made a false statement that it had no association with Sudipti Estates Private Limited, one of its subsidiary companies against which a criminal case was filed for duping him of Rs 31 crore. “A direction is issued to the SEBI to undertake an investigation into the complaints made by the petitioner,” justice S Muralidhar said, adding that the inquiry would be completed within three months.
Earlier, SEBI had refused to entertain the complaint filed by petitioner Kimsukh K Sinha on the ground that it was filed a day before IPO was to close. The court, however, turn-ed down the regulator's contention and said, “Merely because the public issue was closed, SEBI could not be relieved of its statutory duty to conduct an enquiry into the complaint and into the veracity of the statements made in the Red Herring Prospectus (RHP).”
Sinha had alleged he had paid around Rs 31 crore to Sudipti Estate which is jointly owned by two DLF group companies — DLF Home Developers Limited and DLF Estate Developers — to develop his two lands at Sohna, Gurgaon but they failed to do so and refused to return the money. He filed FIR against the company which was later closed after investigation.