India's biggest property developer DLF, barred for three years from raising money on financial markets over allegations it sought to defraud investors, said on Saturday it was appealing the ruling. DLF said it had filed an appeal challenging the order by the Securities and Exchange Board of India (SEBI), one of the toughest ever handed down by Indian regulators. The order accused the New Delhi-based company of "deliberate suppression of important information" in a huge initial public offering (IPO) in 2007.
Some $1.2 billion was wiped last Tuesday from the family-run company's market value following the regulator's decision, and the shares have continued to slide. The company's stock closed down 28.5 percent at 104.95 rupees on Friday. DLF said in a statement that the first appeal hearing would take place at the Securities Appellate Tribunal on October 22. The SEBI order, issued just over a week ago, blocks debt-laden DLF, its wealthy founder-chairman Kushal Pal Singh and five other people from any sale, purchase or other dealings in the security markets for three years.
The ruling was the latest blow for the company, which pioneered development of the Indian capital's fast-growing satellite city Gurgaon. DLF, which builds apartment complexes, malls and office towers, has been hard hit by weak home sales triggered by India's sharp economic slowdown. The SEBI ban means DLF will be unable to tap financial markets to raise funds to reduce its 190-billion-rupee ($3-billion) debt.
The real estate company, which has annual turnover of 100 billion rupees, has sought to assure investors it did not contravene the law "either during its initial public offer or otherwise". DLF said it had been guided by "eminent legal advisors" in preparing the IPO documents and promised to "defend itself to the fullest extent". The company added it was confident of "vindication" over its actions involving the IPO, which raised $2.25 billion in July 2007 - at the time, the country's largest ever debut share issue.
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