DLF battles Sebi at Delhi HC over duping charges

Realty firm DLF Limited moved the Delhi High Court challenging the order of market regulator Sebi to probe accusations by a Delhi-based businessman that he was duped of Rs 340000000 by it and its alleged associate firm Sudipti Estates. Justice Vipin Sanghi has now fixed the petition of DLF Limited for hearing on 22 November as former Attorney General Soli J Sorabji, appearing for the firm, could not advance his arguments on 18 November. DLF, in its petition, has sought quashing of Sebi's earlier order, issued on 20 October, for investigation into the allegations of complainant Kimsuk Krishna Sinha in 2007 against it and Sudipti Estates. The construction major said Sebi's order was passed "erroneously and in blatant non-compliance with the principle of natural justice". "Respondent-1 (SEBI) passed the impugned order directing investigation into the affairs of the petitioner (DLF) relying not on complaints of Respondent-2 (Sinha) but on various extraneous materials which were not available to the petitioner acting contrary to the jurisdictional mandate set in the order on July 21, 2011," DLF said. It further said the order to probe its affairs has been made in violation of "express directions" of the court. Earlier, Sebi ordered investigation into the issue of IPOs after the high court, in July this year, asked it to look into the complaint of Sinha against DLF Group and Sudipti Estates and pass an order in three months. In the FIR lodged against Sudipti in Delhi, Sinha had alleged that the company and its directors/agents had "lured and compelled" him to transfer certain plots of land and did not fulfil the promise of developing the land and providing him higher returns. The market regulator had said, "The Securities and Exchange Board of India shall investigate into the allegations levelled by the complainant in respect of DLF Limited and Sudipti Estates Private Limited ." "The investigations would focus on violations, if any, of the provisions of the erstwhile SEBI (Disclosure and Investor Protection) Guidelines, 2000 read with relevant provisions of the Companies Act, 1956," Sebi further said. Sinha had alleged that Sudipti, DLF Home Developers Limited and DLF Estate Developers Limited were sister concerns, inextricably linked and were part of the DLF Group. DLF, however, has maintained that Sudipti is a separate legal entity owned and controlled by different individuals. The construction major in a Draft Red Herring Prospectus (DRHP) filed for a public issue in May 2006 had mentioned that Sudipti was its associate company. However, the DRHP was withdrawn and thereafter, it filed a fresh prospectus in January 2007, wherein Sudipti was not mentioned as an associate. PTI