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1) What is the case all about?
Sebi and Sahara are locked in a bitter legal tussle over the issue of refunding of Rs 24,000 crore by its two companies — Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC) — to investors from whom they had raised the money. Sebi says the funds were raised illegally. The Supreme Court had ordered Sahara to refund the money raised from investors with interest.
2) Why did SEBI ask Sahara to refund the money?
Sebi asked Sahara to refund investors because it felt Sahara was raising money in violation of capital raising norms and certain sections of the Companies Act. Sebi found that under the garb of an OFCD, the company was running an extensive parabanking activity without conforming to regulatory disclosures and investor protection norms pertaining to public issues.
3) What did Sahara do?
Sahara challenged Sebi’s order saying the capital markets regulator did not have any jurisdiction over the group companies since they were not listed. The court dismissed Sahara’s petition, also hauling it up for not complying with its orders.
4) What orders did Sahara not comply with?
The court directed Sahara to furnish details of the OFCDs it had issued including subscriptions and refunds within 10 days and submit these to Sebi. It also gave Sahara 90 days to deposit roughly Rs 24,000 Cr. Sebi which was given powers to freeze Sahara’s accounts, attach properties etc. Sahara has repeatedly missed deadlines to comply with the Supreme Court’s orders. It claims the total money due is only Rs. 5,200 Cr, as the balance amount has already been repaid.
Sebi meanwhile, told the court that while it had begun the refund process; it couldn’t trace many of Sahara’s investors as details submitted by Sahara were not in the prescribed format, with addresses and other details missing in some cases.
Sebi meanwhile, told the court that while it had begun the refund process; it couldn’t trace many of Sahara’s investors as details submitted by Sahara were not in the prescribed format, with addresses and other details missing in some cases.
