High Court gives respite to Sahara

Asks Sebi to file response by December 4

Giving respite to the Sahara Group entities, banned by market regulator from accessing public fund, the Allahabad High Court today asked the Securities and Exchange Board of India (Sebi) not to take any “coercive” action against the company and file its response by Saturday.

The Lucknow bench of the Allahabad High Court in its interim order said the decision on admissibility of the petition and injunction sought by Sahara group firm will be taken after the response from Sebi and Registrar of Companies.

The order, passed by a division bench comprising Justice Devi Prasad Singh and Justice V K Dixit on the petition filed by the Sahara Real Estate Corporation Ltd, asked respondents — Sebi and the Registrar of Companies — to file their responses by December 4 and “till then, no coercive action shall be taken by the respondents”.

In its petition filed before the high court on November 29, the Sahara group firm challenged the order of Sebi restraining two entities and promoters, including Chairman Subrata Roy, from accessing market for non-disclosure of information.

The Sahara company has argued that only the central government may pass such an order and not the Sebi.

The market regulator, according to the company, had issued the order without providing it an opportunity to put forth its viewpoint.

Ahead of moving the court earlier this week, Sahara group had come out with a major advertisement campaign in the national dailies saying it would challenge the November 24 order which was dubbed as “irresponsible” and reflected “malice and bias” on the part of Sebi officials.

Apart from banning Sahara India Real Estate Corporation (SIRECA), Sahara Housing Investment Corporation (SHICL) and their promoters — including Roy — from raising money from the public, Sebi said there was a need for lifting the veil on corporate fund raising.

It also sent a recommendation to the government for taking appropriate action under the Companies Act.

In its campaign the group had said that “Sebi has pushed us against the wall, that is why in the interest, image and goodwill of entire Sahara India Pariwar, we have been forced to come out with all the details... Now we shall soon appeal against Sebi’s action at an appropriate forum.... Certain individuals occupying their office (Sebi officials) act with malice and biased approach which serve no public good and earn only a bad name”.