Shares of India's largest developer plunges after company is barred from raising funds

MUMBAI (AFP, Reuters) - Shares of DLF Ltd. plunged as much as 27 per cent on Tuesday after India's market regulator barred the country's largest listed property developer from tapping capital markets for three years for allegedly defrauding investors.

DLF shares were down 25.5 per cent at 109.60 rupees at 0512 GMT, set for their biggest slide since October 2008. DLF has slumped 30 per cent this year to touch a record low, compared with a 25 per cent gain in the benchmark S&P BSE Sensex.

The Securities and Exchange Board of India (SEBI), which has been seeking to improve sometimes murky investment standards, accused the company of "active and deliberate" suppression of important information at the time of its record-breaking 2007 initial public offering (IPO).

The ruling marks the latest regulatory threat to the property developer, which is also facing a probe from the antitrust watchdog and is also at the centre of a political controversy over sweetheart land deals in the northern state of Haryana.

The order was one of the toughest ever handed down by regulatory authorities, and would block debt-laden DLF from raising money through the sale of stocks or bonds. It has been hoping to raise funds to pay down some of its debt which at 191 billion rupees (S$3.97 billion) at the end of June.

The regulator imposed no fine on the company but barred DLF and six people, including the company's billionaire founder and chairman K.P. Singh, from any sale, purchase or other dealings in the security markets for three years.