DLF Redeemed Crores in Mutual Fund

Jan 28, 2015 by

DLF Redeemed Crores in Mutual Fund

The Securities Appellate Tribunal (SAT) allowed DLF to redeem mutual funds which is valued to Rs.1806 crores. This initiative has been taken to meet the needs of the working capital and to meet the payments of the service debts. SEBI had earlier banned DLF to use the capital market for some years. Now DLF has earned the permission to redeem money from the market of mutual funds. The main appeal of DLF against the SEBI would be heard in this December. But before that SEBI and the company have to file their appeal in front of SAT.

Guidelines of the redemption

SAT gave permission to the company that they can redeem upto Rs.767 crore in the present month and Rs.1039 crore in December. It means that DLF is allowed to meet its daily requirements even its obligations to its creditors with the redemption of the mutual funds. It also allowed the DLF to redeem its shares from the subsidiaries. To grant permission from SAT DLF has submitted some of the relevancy documents. They have submitted the list with name of the subsidiaries and also the bank details of the firm to be redeemed.

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Requirement for this redemption

DLF submitted thelist of subsidiaries for redemption as their subsidiaries were not in a position to fulfill their commitments to the financial institutions and bank. DLF maintains a consolidated bank account where they submit all the surpluses from its subsidiaries. SEBI is of the opinion that they allowed this relief as they did not the company to be bankrupt. SEBI said that it has taken this initiative to set a certain benchmark so that in future SEBI does not set such ambiguous orders. SEBI did not oppose to this redemption to satisfy the appealers.

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