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BW Businessworld

Sahara Group Moves SC Against SAT Order

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The Sahara group on Friday moved the Supreme Court challenging Securities Appellate Tribunal (SAT) order asking the company to refund the money raised through Optionally Fully Convertible Debentures (OFCD) to investors within six weeks.

SAT had on October 18 asked the group's two companies -- Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation Ltd) and Sahara Housing Investment Corporation -- to return the money.

Sahara, which has challenged the SAT's order has also sought an interim stay on it.

SAT had passed the order on an appeal filed by the group challenging the order of the SEBI which had in June asked the two its two entities to return the money collected from investors through financial instrument OFCD citing violation of regulatory norms.

Besides, the stock market regulator had also restrained the entities from accessing the securities market for raising funds till the time payments are made to the satisfaction of the SEBI.

The two companies and its promoter Subrata Roy Sahara, and the directors -- Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary-- jointly and severally were told to refund the money collected.

The company had then approached the Supreme Court which asked it to approach the Tribunal.

While dismissing the appeal, the SAT had held that the market regulator has jurisdiction over such fund raising schemes.

"...we may mention that in view of our findings that OFCDs issued by the company are securities and that the issue was a public issue requiring mandatory listing and that SEBI has the jurisdiction under the SEBI Act to deal with all kinds of securities and companies, whether listed or not...", the order had said.

Sahara had contended that SEBI has no jurisdiction over the issue as the companies involved were not listed. It maintained that entities involved were privately-held companies and were under the jurisdiction of the Ministry fo Corporate Affairs (MCA).

But the Tribunal did not agree with its contention and dismissed the appeal saying "this argument has no merit... A plain reading of regulation... leaves no room for doubt that the regulations apply to all public issues."