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 () into advances against goods in another group firm, Ltd.

The move comes after three investors, , and , filed complaints with the ministry and market regulator Securities and Exchange Board of India () alleging forced and unilateral conversions in violation of the Supreme Court order directing the company to refund OFCD 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 Sebi 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

Sebi revises norms for liquidity enhancement schemes

Exchanges can provide trading incentives for three years

Slow start for VIX futures

High costs, lot size said to be impediments

Traders trim positions ahead of poll results

Rollovers decline; open interest drops

Sebi's Draft Fatca norms: Greater scrutiny ahead for high-value US a/cs

Individual accounts with holdings of more than $1 mn will come under greater scrutiny; those with balances less than $50,000 will be exempt from ...

Cairn India puts up a good show

Medium-term prospects remain good, but company faces challenges on the production front

Back to Top