New Delhi, October 13
In a major setback to DLF, stock market regulator Securities and Exchange Board of India (SEBI) has barred India's largest real estate company and its top officials, including chairman KP Singh, from accessing or dealing in stock markets for three years.

The SEBI order found the company and six of its top officials guilty of suppressing material information in its offer document at the time of its public issue in 2007. Debarring a company from the stock markets is one of the strongest punitive actions available under SEBI regulations. This means the company cannot raise funds in the stock market in any form for the stipulated period. For a large listed company, it is seen as a major setback because markets tend to react to such a punitive action. Vivek Gupta, Director Research, CapitalVia Global Research, said the news will impact the entire realty sector and the DLF stock negatively.

While trading in shares of the company will continue, the SEBI order will have an impact on the stock price and the company's fund raising plans. Under such action, the company can appeal to the Securities Apellate Tribunal (SAT) against the SEBI order and thereafter approach the courts.

DLF has been in the limelight recently for some land transaction in poll-bound Haryana. Those prohibited from the markets include KP Singh's son, Rajiv Singh (vice chairman) and daughter Pia Singh (whole time director), Sebi said in its order.

DLF said it came to know about the October 10 SEBI order today. It is being reviewed by the legal team.

"DLF and its Board wish to reassure its investors and all other stakeholders that it has not acted in contravention of law either during its initial public offer or otherwise. DLF and its board were guided by and acted on the advice of eminent legal advisers, merchant bankers and audit firms while formulating its offer documents.

"DLF will defend itself to the fullest extent against any adverse findings and measures contained in the order passed by SEBI. DLF has full faith in the judicial process and is confident of vindication of its stand in the near future," said the statement.

The SEBI order is explicit in its findings. "I find that the case of active and deliberate suppression of any material information so as to mislead and defraud the investors in the securities market in connection with the issue of shares of DLF in its IPO is clearly made out," Sebi's whole-time member Rajeev Agarwal said in his 43-page order.