What took Sebi so long?

Whether market regulator Sebi’s order barring DLF’s billionaire chairman, K.P. Singh, his son, daughter and three other executives from accessing the capital markets for three years will have a salutary effect on companies which try to dodge disclosure norms and mislead and defraud investors will be known by and by.

High-profiles promoters, from the Adanis to Sahara and Polaris, have in the past been banned for involvement in stock-market scams or not providing adequate disclosures, but corporate malfeasance goes on. DLF had top merchant bankers handling its Rs 9,187.5-crore maiden public issue in 2007 and even they did not carry out their duties diligently.

They are lucky this case pertains to the period before Sebi’s regulation making merchant bankers responsible for disclosures in the IPO prospectus came into effect. Merchant bankers are paid hefty fees and, as Mr Singh’s legal counsel said in his defence, he is 82 years old and depended on merchant bankers who handled the issue. What is perplexing is that Sebi took so long to come out with its order after a complaint in 2007 by an alert Kimsuk Sinha, who was defrauded of Rs 34 crore by a DLF subsidiary company in a land deal.

Mr Sinha had filed an FIR against the subsidiary and complained to Sebi about this omission in the prospectus. Mr Singh, who has been in the news for controversial land deals with Robert Vadra, is not likely to see the end of his woes as there is a suggestion that the DLF share be removed from front-line stocks in the Nifty.