Sahara V/s. SEBI
Sahara India Real Estate Corporation Ltd ( “SIRECL”) and Sahara Housing Investment Corporation Ltd (“SHICL”) (both unlisted public companies), in March 2008 and September 2009, raised around 24,000 crores rupees from investors by issuance of Optionally Fully Convertible Debentures (OFCDS) by passing Special resolution U/S 81(1A). Subsequently they filed RHPs to the concerned ROC and specifically mentioned therein that the company did not intend to list the shares on any stock exchanges. It is indicated that the intention of the company was to carry out infrastructural activities and the amount collected from the issue would be utilized in financing the completion of projects, namely, establishing/constructing the bridges, modernizing or setting up of airports, rail system or any other projects which might be allotted to the company from time to time.
One of the group company Sahara Prime City Limited intends to raise funds through listing of its shares filed Prospectus to SEBI. While processing the prospectus, SEBI received complaint from Mr. Roshan Lal alleging that Sahara group was issuing Housing Bonds without complying with Rules/Regulations/Guidelines by RBI/MCA/NHB, SEBI also received complaint from “Professional Group of Investors Protections” which prompted SEBI to ascertain the correct factual position.Details of the Proceedings are as follows:
|Nov,2010||SEBI restrains Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd from raising funds from optionally fully convertible debentures(OFCD)|
|Dec,2010||Sahara gets SEBI order stayed in Allahabad High Court.|
|Jan,2011||SEBI issues advertisements cautioning investors.|
|April,2011||Allahabad High courts vacates stay. Sahara goes to the Apex court.|
|May,2011||Supreme Court asks SEBI to proceed with OFCD probe.|
|June,2011||SEBI directs the two Companies to refund the money collected from investors.|
|Oct,2011||SAT upholds SEBI order.|
|Nov,2011||Sahara challenges SAT Order, obtains stay.|
|Jan,2012||Court asks Sahara to furnish details of assets and reserves.|
|Aug,2012||Landmark Judgment by Supreme Court upholding SAT Order.|
SaharasSIRECL&SHICL) would refund the amounts collected along with interest @ 15 % per annum to SEBI within a period of 3 months from the date of judgment, which shall be deposited in a nationalized bank.
Saharas were also directed to furnish the details with supporting documents to establish whether they had refunded any amount to the persons who had subscribed through RHPs dated 13.3.2008 and 16.10.2009 within a period of 10 (ten) days from the pronouncement of this order and it is for the SEBI to examine the correctness of the details furnished.
The court made it clear that if the documents produced by Saharas are not found genuine or acceptable, then the SEBI would proceed as if the Saharas had not refunded any amount to the real and genuine subscribers who had invested money through RHPs.
SEBI shall have the liberty to engage Investigating Officers, experts in Finance and Accounts and other supporting staff to carry out directions and the expenses for the same will be borne by Saharas and be paid to SEBI.
SEBI shall take steps with the aid and assistance of Investigating Authorities/Experts in Finance and Accounts and other supporting staff to examine the documents produced by Saharas so as to ascertain their genuineness and after having ascertained the same, they shall identify subscribers who had invested the money on the basis of RHPs dated 13.3.2008 and 16.10.2009 and refund the amount to them with interest on their production of relevant documents evidencing payments and after counter checking the records produced by Saharas.
SEBI in the event of finding that the genuineness of the subscribers is doubtful, an opportunity shall be afforded to Saharas to satisfactorily establish the same as being legitimate and valid. It shall be open to the Saharas , in such an eventuality to associate the concerned subscribers to establish their claims. The decision of SEBI in this behalf will be final and binding on Saharas as well as the subscribers.
SEBI if, after the verification of the details furnished, is unable to find out the whereabouts of all or any of the subscribers, then the amount collected from such subscribers will be appropriated to the Government of India.
The Court also appointed Mr. Justice B.N. Agrawal with an monthly remuneration of Rs. 5 Lakhs to oversee the entire steps adopted by SEBI and other officials for effective implementation of the directions issued by this Court and which shall be borne by SEBI and recoverable from Saharas.
We also make it clear that if Saharas fail to comply with these directions and do not effect refund of money as directed, SEBI can take recourse to all legal remedies, including attachment and sale of properties, freezing of bank accounts etc. for realizations of the amounts.Latest developments:
The last hope of Sahara group to get more time to refund Rs 24,000 crores to its investors was dashed by the Supreme Court which dismissed its plea and pulled it up for not complying court's earlier order to return the money by first week of February.