Business Standard

MCA turns heat on Sahara over OFCD conversion

Asks SIRECL to explain conversions into Q Shop by December 31

Related News

The (MCA) has initiated an enquiry calling for detailed explanations from (SIRECL) for converting money raised by issuing optionally fully convertible debentures (OFCD) into advances against goods in another group firm, Ltd.

The move comes after three investors, Amitabh Thakur, and Ashish Verma, filed complaints with the ministry and market regulator Securities and Exchange Board of India (Sebi) alleging forced and unilateral conversions in violation of the Supreme Court order directing the company to refund money to investors. Business Standard has reviewed a copy of one of these complaints.

In a letter dated December 21, the ministry, acting through the Registrar of Companies (RoC), Kanpur, directed the company to furnish, “your parawise clarification/explanation to the allegations raised by the complainants along with documentary evidence within ten days”. The letter further said if the company fails to do so, “necessary penal action under relevant provisions of the Companies Act will be initiated.” Business Standard has reviewed a copy of this letter.

The ministry wanted to know whether any approval under Section 297 was obtained by the company for agreement with Sahara Q Shop towards conversion of bonds. It also sought details of terms of such conversion and whether the prospectus filed provides for “utilisation of bond amount for purchase of goods of Sahara Q Shop”.

MCA also has asked whether the Supreme Court order provides for conversion of bonds instead of refunding the amount. q

An email questionnaire sent to Sahara group spokesperson remained unanswered at the time of going to press.

Nutan Thakur told Business Standard, “The Sahara group was forcibly and unilaterally converting bonds and other investments in Sahara India Real Estate and Sahara Housing Invest to Sahara Q Shop without any consent of the investor in defiance of the orders of the Supreme Court. We had lodged complaints with both and the Registrar of Companies. We have received a letter from RoC, Kanpur that they have given 10 days for giving explanation.”

In August, the Supreme Court had directed Sahara India Real Estate and Sahara Housing Invest to refund over Rs 24,029 crore raised from 29.6 million investors along with 15 per cent interest. It had given Sebi three months time to execute these refunds.

However, on November 30, when the deadline for refunds expired, Sahara moved the Supreme Court seeking permission to submit Rs 5,120 crore as the outstanding. The chief justice has directed the group to deposit a further Rs 10,000 crore by early January and the ‘remaining amount’ by February.

However, Sahara group claimed in subsequent newspaper advertisements that it had an outstanding of Rs 2,620 crore only against investors of OFCD. It further claimed that the remaining Rs 2,500 crore it has submitted was a buffer amount to account for any differences or disputes.

Read more on:   
|
|
|
|
|
|
|

Read More

Two entities fail to make prima facie case to revoke ban: Sebi

The Securities and Exchange Board of India (Sebi) today said the restraining order on two entities, related to plunge in some mid-cap stocks in July, ...

Quick Links

 

Market News

Cotton exports to decline 45% this year on lower demand from China, Bangladesh

With lower exports estimates, India will have surplus cotton leading to steep fall in prices this year

Karnataka sugar mills unlikely to meet Nov 30 deadline on payment of arrears

A majority of the mills, say their owners, are deep in debt and, hence, are unable to borrow any fresh money from banks or financial

Today's picks- 27 November 2014

Nifty, Bank Nifty, BHEL, HCL Technologies & Hindustan Unilever

Sebi to allow partly paid shares to foreign investors

According to sources, while the investment by foreign investors in public issues and rights issues would be eased, the rules around preferential ...

Akash Prakash: Debunking two worries

Are India stocks over-owned? And are they too expensive?

Back to Top