SEBI says it should not be made party in DLF case

SEBI has argued before the Delhi HC it was not under its purview to probe complaint against unlisted realty giant DLF.

Market regulator SEBI has argued before the Delhi High Court it was not under its purview to probe complaint against unlisted realty giant DLF and its name in the plea filed by minority shareholders should be dropped.

In an affidavit submitted in the court, SEBI contended that the activities of DLF, which was an unlisted company when the rights issue of debentures was made, did not fall "within the domain and jurisdiction" of the regulator.

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The affidavit was filed after the court issued notices to SEBI, DLF and the Ministry of Company Affairs on a PIL filed by Society for Consumers and Investors Protection last year.

The NGO had alleged violation of regulatory norms by DLF, which is planning a public issue by the end of current fiscal. It had also sought a probe into the alleged fraud committed on minority shareholders by not allotting debentures and their consequent conversion into equity shares.

SEBI said as the matter pertained to an unlisted company, the Ministry of Company Affairs was the "appropriate authority to take the required action, if any," against DLF.

Denying any inaction or lethargy on its part, the market regulator said "it has taken all steps which were within its control, domain and jurisdiction so as to ensure that complaints received by it from minority shareholders of the real estate company were duly looked into and redressed".

According to the affidavit, SEBI forwarded the matter to the Ministry of Company Affairs, also a party to the case, to look into the grievances of minority shareholders as the ministry was the only appropriate authority to deal with the issue under the Companies Act 1956.