MUMBAI (Reuters) - The Securities and Exchange Board of India (SEBI) has ordered the cancellation of Sahara conglomerate's fund management business permit in six months, saying it failed to meet a "fit-and-proper" rule with the group founder in jail.
Sahara founder Subrata Roy was arrested in March last year after the company failed to comply with a court order to refund money it had raised from millions of small investors by selling them bonds later ruled to be illegal.
In its order, SEBI said due to the court proceedings against Roy in the issuance of bonds by two of his group firms, its fund management business was "no longer fit and proper" to carry out the business of a mutual fund.
Sahara is a household name in India as the former main sponsor of the national cricket team. It also owns major hotels overseas, including the Plaza in New York and Grosvenor House in London.
Sahara did not immediately respond to a request for comment.
(Reporting by Sumeet Chatterjee and Devidutta Tripathy)
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