Refund to investors: SC admits Sahara's plea

The Supreme Court on Monday admitted Sahara Housing Investment Corporation Ltd’s appeal against an order of the Securities Appellate Board asking it to refund Rs 17,400 crore to investors, and granted time till January 20 to do so. The case will be heard again on that day by a bench headed by Chief Justice S H Kapadia. The SC had earlier extended the time for repayment from November last year till today.

On the last hearing, the court had asked the Sahara group of companies to state on an affidavit the amount of funds collected, the net worth of the companies which had received the deposits and how they sought to secure the liabilities. These queries were to protect the interests of the investors. The Sahara group has filed a 300-page explanation in reply to these queries. Its counsel, F S Nariman, told the court the affidavit made it clear that the investments were secure and the assets are adequate.

However, during Monday’s hearing, Sebi moved an application seeking further information from the group on issues regarding security of the deposits. It sought time till January 20 to study the reply of the companies.

Sebi submitted that according media reports, the funds collected as optionally fully convertible debentures (OFCD) have been transferred to Sahara Credit Cooperative Society, another scheme run by the group.

It expressed apprehensions about the funds and demanded further clarity by seeking information on several more aspects.

Sebi sought details regarding the real estate projects where the amount is invested, details of other assets in which the proceeds have been used, current assets of the group, advances under joint ventures, loans and advances given to corporate and related party transactions.

An estimated 2.3 crore persons have invested in two group companies — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — in the form of OFCDs.