Former DLF executives under SEBI scanner for alleged insider trading

The role of 19 senior executives of real estate major DLF and a stock broker is being probed by 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. 

The investigation is ongoing and there is no finality on their involvement in illegal trades. 

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. 

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regulator was trying to probe the unusual buying and selling of DLF shares closer to the days when the deal talks were unpublished price sensitive information (UPSI).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

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, DLF announced that it had concluded the Rs. 9,000 cr 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 Rs. 100 to Rs. 250. The price rise and fall was sharp in 2015, when the deal was just announced.