SC orders SEBI to verify Sahara's title deeds

SEBI to ascertain net worth of the unencumbered title deeds submitted by Sahara companies to secure the investors money

The Supreme Court Tuesday asked market regulator SEBI to verify the genuineness of the title deeds submitted by Sahara to secure the investors money that it had collected through Optionally Fully Convertible Debentures (OFCD).

A bench of Justice K.S.Radhakrishnan and Justice Jagdish Singh Khehar also asked the Securities and Exchange Board of India (SEBI) to ascertain the saleability and net worth of the unencumbered title deeds submitted by Sahara companies to secure the investors money.

Two Sahara Companies - Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited - had to pay nearly Rs. 24,000 crore in the wake of the apex court's Aug 31, 2012 order. They have already deposited the draft for Rs.5,000 crore with SEBI and have to pay the balance of Rs. 19,000 crore.

The court also asked the market regulator to give sequential details of the properties sold by Sahara and the money refunded by it to the investors.

The court order came after senior counsel Arvind Dattar appearing for SEBI told the court to reject all claims by Sahara of having refunded the investors money and proceed with its main contempt plea for not complying with the Aug 31, 2012 and subsequent orders.

However, Justice Radhakrishnan said that first they will like to see whether the court's order of returning the investors money has been complied with or not and only then would they proceed with the contempt plea.

Pointing to the shifting positions taken by Sahara on the status of investors money, Dattar told the court that now Sahara was saying that the refund of their investments by its two companies to parent company Sahara India was in cash.

Dattar told the court that all investments made by Sahara India in its two companies were banking transactions but in 2012 it received the refund of these investments in cash.

At this Justice Radhakrishnan wanted to know the Reserve Bank's guidelines on the manner and mode of such transactions.

Dattar said that it had to be through cheques.

The SEBI counsel told the court that between May 2012 and October, 2012 Sahara India received Rs.25,156.55 crore and another Rs.42.92 crore after October 2012.

Dattar said that though Sahara India received Rs.25,199,50 crore from its sister concerns but refunded an amount of Rs.29,878.28 crore to the investors. He wondered from where this additional amount of more than Rs.4,500 crore surfaced.

Justice Khehar said this was by way of 15 percent interest service.

The court directed the listing of the matter for Feb 20.