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DLF public issue to hit market in July; police case filed

Written by: Staff
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New Delhi, Jun 17 (UNI) Notwithstanding filing of case by the Postal Department with the Police in regard to the contentious issue of minority shareholders, DLF Ltd today asserted it is going ahead with its mega public issue in the second week of July.

''Irrespective of the market volatility, we are on schedule for our IPO which we expect to launch some time around July 10 '', DLF Senior Vice President - Finance Saurabh Chawla told newspersons here.

Mr Chawla also denied reports that the country's largest real estate company might dilute the size of the issue in the wake of the markets being hammered since May.''DLF is the best story to be speculated'', he said.

However, the valuation of the DLF - IPO would depend on the ''price discovery'' which will be ascertained after the merchant bankers complete their interacttion with the investors.

Mr Chawla was confident about the Securities and Exchange Board of India (SEBI) giving a clearance to the DLF IPO, billed to be the largest ever in the Indian corporate sector, despite the Postal Department filing a case with the Police.

The issue related to a section of the minority shareholders approaching the Senior Superintendent of Posts complaining that the UPC (Under Postal Certificate) stamps on the offer letters to them were not genuine.

The DLF had offered the minority shareholders unsecured convertible debentures of Rs 100 each on rights basis in December 2005. The letter of offer was sent to the shareholders under UPC on December 23, 2005 mailed by an independent licensed bulk mailing agency.

On complaints from the minority shareholders, one of whom is a bigtime industrialist, the Postal authorities found that the UPC stamps, used by the mailing agency, were not genuine. They have approached the Police.

''We will cooperate with the investigation. In fact, we are surprised by the slow pace of investigation'', Mr Chawla said adding that the SEBI enquiry is simultaneously on and the company is responding to all the queries being posed by the market regulator.

However, he declined to elaborate as to what kind of queries were coming from the SEBI.

Mr Chawla said certain sections of the minority shareholders did not accept the convertible debentures not realising the true value of the company. He, however, accepted that DLF at the point of offering these debentures had stated its intention not to hit the market with an IPO. He said the left-out sharholders would have felt that they had missed an opportunity.

As the company decided to go public in March 2006 it converted the debentures of Rs 100 each into 10 equity shares of Rs 10 each. It also declared a bonus of seven equity shares of Rs 10 each held on the record date. The entire excercise resulted into a huge valuation for the minority shareholders who feel they are being deprived of the DLF bounty.

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