The Hindu Business Line : SEBI slaps Rs 1-cr fine on DLF Commercial Developers

SEBI has slapped a fine of Rs 1 crore on DLF Commercial Developers Ltd, for trading in the shares of Bhorukha Financial Services Ltd (BFSL) at the unrecognised Magadh Stock Exchange (MSEA) from August 1 to August 12, 2005.

As per a SEBI order, out of total trading turnover of Rs 90.06 crore during the said trading period, approximately Rs 89.28 crore was in the scrip of BFSL, which accounted for nearly 99 per cent of the total trading turnover.

BFSL scrip is listed only in the Bangalore Stock Exchange (BgSE). However, it was `traded' in MSEA under the `permitted category' by member-broker Rajat Share and Stock Brokers Pvt. Ltd, who acted as broker to both the sellers (promoters of BFSL) and the buyer (DLF). The promoters of BSFL sold their entire holding in BFSL at Rs 4,490 per share to DLF.

SEBI has argued that as the MSEA was unrecognised, corporate entity like DLF, who is slated to bring a largest IPO in Indian capital market of over Rs 10,000 crore and the promoters of BFSL, which is selling their own company shares involving Rs 90 crore, are expected that the compliances and due diligence level should have been of very high standard.

SEBI has therefore also fined the eleven promoters of BFSL including Mr Satyanarayan Agarwal, Mr Viveek Agarwal, Ms Umah Agarwal, Mr Siddhartha Agarwal and others with Rs 1 crore penalty.

DLF Commercial Developers Ltd is a fully owned subsidiary of DLF Universal.

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SEBI slaps Rs 1-cr fine on DLF Commercial Developers