ISSUE:
If transactions were carried out with the aim to defraud, and if DLF had any connections that would have allowed it to have reasonable control over the subsidiaries?
Should DLF have included these subsidiaries and the FIR in its prospectus, or was the information in the red herring prospectus insufficient for the investors to make an informed choice about the IPO? Does the IPO's impact from these FIR and subsidiaries matter?
Whether the directors had knowledge of those transactions and knowingly withheld it prior to the IPO with the intent to deceive investors?
RULE:
When the court overrides a company's restricted liability to hold investors or directors personally accountable for any fraud committed, this is known as piercing the corporate veil. The ability of the courts to impose personal culpability on directors and investors must be exercised with extreme caution because doing so would compromise a company's fundamental characteristics of being a separate legal entity with limited liability.