SC directs Sahara to approach SAT against Sebi order on OFCDs

The Supreme Court today directed Sahara Group firm Sahara India Real Estate Corp to approach the Securities Appellate Tribunal against market regulator Sebi's order directing the return of money collected from investors for an OFCD scheme within a period of three weeks.

A three-member bench headed by Chief Justice S H Kapadia also directed the Securities Appellate Tribunal (SAT) to decide Sahara India Real Estate Corp's appeal against Sebi within a period of eight weeks.

"We are of the view that keeping in mind interest of the investors... Better option would be to give an opportunity to the petitioner (Sahara) a hearing before SAT," the bench observed.

Meanwhile, senior advocate Fali S Nariman appearing for Sahara Group firm submitted that till the final order of the SAT, it will not invite any fresh deposit in the optionally fully convertible debentures (OFCD) scheme.

"We make it clear, in the appeal which is proposed, that Ministry of Corporate Affairs (MCA) should be a party as a respondent, particularly in view of issues arising in this statutory appeal," the bench added.

The apex court also said that the interim order of Sebi would not be operational till the appeal is decided by SAT.

In addition, the apex court directed the Sahara Group firm to withdraw its petition filed against Sebi in the Allahabad High Court.

The apex court said that SAT will take a decision irrespective of Sebi's interim order and the remarks passed by the Allahabad High Court in this issue.

The apex court also directed the Sahara Group firm not to take any adjournments before SAT.

The issue relates to Sebi's finding in November that two Sahara Group firms -- Sahara India Real Estate Corporation and Sahara Housing Investment Corporation -- were raising funds from the public through an optionally fully convertible debentures (OFCD) scheme without conforming to prudent disclosure and other investor protection norms.