Markets

Former DLF executives under SEBI scanner for alleged insider trading

PALAK SHAH Mumbai | Updated on October 29, 2020 Published on October 28, 2020

Company denies irregularity, says queries from regulator were routine

The role of 19 senior executives of real estate major DLF and a Gurugram-based stock broker is being probed by market regulator SEBI for alleged insider trading practices.

Most of these executives, who were in the finance and legal departments, have since exited the company over the past few years. But they are being probed for trading in shares of DLF, directly or via a front, when the company was involved in deal talks with Singapore’s sovereign fund GIC.

Also read: SEBI probing role of Sun Pharma ex-board member Ashwin Dani

BusinessLine is not naming the individuals since the investigation is ongoing and there is no finality on their involvement in illegal trades.

When contacted, DLF denied any irregularity and said the queries from SEBI were routine. “SEBI sends queries about the key people involved in big transactions in many cases and information was asked for and routinely replied. There has been absolutely no irregularity in trading by any member of senior management or KMP (key management persons),” it said in a written statement.

DLF also said that there was no link between the SEBI probe and the exit of these executives from the company.

"Most of the said executives enjoyed a very successful stint with DLF and have moved to pursue different career aspirations or have superannuated in some cases,” it said.

GIC deal

Queries by SEBI to DLF show that the regulator has been asking the company about the role these 19 executives played during their stint. SEBI also sought information on the particular issue of who all had information about the GIC deal. SEBI had come across unusual trading in DLF shares by the executives and entities linked to them.

Also read: DLF ‘battle ready’ for the future: KP Singh

The regulator was trying to probe the unusual buying and selling of DLF shares closer to the days when the deal talks were unpublished price sensitive information (UPSI), sources told BusinessLine. Both cash market and derivative segment data have been analysed by SEBI.

Reportedly in October 2015, DLF had first announced that its promoters would sell their entire stake in DLF Cyber City Developers (DCCDL), which held the bulk of the commercial assets of the group, to GIC. In 2017, the company announced that it had concluded the ₹9,000-crore deal, under which GIC picked up a 33.34 per cent stake in DCCDL.

Over those two years the share price of the company rose from around ₹100 to ₹250. The price rise and fall was sharp in 2015, when the deal was just announced.

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Published on October 28, 2020
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