By Aditi Shah and Himank Sharma
NEW DELHI/MUMBAI (Reuters) - Debt-laden Indian property developer DLF Ltd has won its appeal against a three-year ban from accessing capital markets imposed by the market regulator, a decision that overturned the country's harshest ever regulatory punishment.
The market regulator, Securities and Exchange Board of India (SEBI), imposed the ban on DLF last year for allegedly misleading investors by withholding information about some of its units and the criminal cases pending against them in its IPO prospectus.
The Securities Appelate Tribunal (SAT), which heard DLF's appeal, concluded on Friday that neither the company nor any of its officers derived any gains from withholding information, and, therefore, should not be penalised.
The verdict will boost DLF in its struggle to reduce its net debt, which stood at $3.3 billion at the end of December.
"This is a vindication of our stance and clearly states that we did not in any way (violate) any of the regulations in our disclosures," DLF executive director in charge of finance Saurabh Chawla told Reuters.
While Chawla said the company has no immediate plans to turn to the stock market to raise funds, it has been considering raising money by issuing commercial mortgage-backed securities and listing real estate investment trusts (REITs).
DLF said in February is had appointed JPMorgan and Morgan Stanley to advise it on a planned listing of two REITs, one for offices and the other for shopping malls, and other efforts to raise cash.
India last month paved the way for listing REITs after the government said in its budget it would streamline taxes to facilitate the listing of REITs. It is yet to provide details.
"This order did not impact the CMBS or the REIT listing... but yes the overhang always existed and it is always better to have your own stand vindicated which has happened," Chawla said.
Chawla said the company was waiting for more clarity before going ahead with the listing, which he said could be between the second and third quarters of the fiscal year starting April 1.
Cash-strapped DLF has 30 million square feet of leased offices and shopping malls and is on target to earn an annual 24 billion rupees in rent by end-March.
DLF is also planning a CMBS transaction which would be in excess of 30 to 40 billion rupees, Chawla said in an interview with a television channel.
The securities tribunal's presiding officer J.P. Devadhar earlier on Friday ruled the regulator's ban was "unsustainable" and reduced it to six months from the day of its imposition, Oct. 13, meaning it would have lasted only for another month.
Later, a majority bench of the tribunal voted to completely set aside the SEBI order.
The ruling comes as a blow to SEBI which has stepped up its efforts to curb market manipulation and has called for better disclosures by listed companies.
($1 = 62.6700 Indian rupees)
(Editing by Keith Weir)
