Sahara Appeal Against Sebi Dismissed
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29 Nov,2012 13:35 IST

Sahara Appeal Against Sebi Dismissed

Sahara buys NY's Plaza Hotel but case involving Rs 24,000 cr refund festers

BW Online Bureau & Agencies

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The fortunes of the Sahara group continues to be mixed. Even as reports came in of Sahara India acquiring 75 per cent stake in the Plaza Hotel in New York for $575 million, the Securities Appellate Tribunal (SAT) dismissed an appeal by two Sahara group firms against the market regulator Sebi in the case involving refund of about Rs 24,000 crore with interest to about three crore investors.

Read also: Sahara Acquires 75% In Plaza Hotel

Sahara firms in their appeal had sought the tribunal's intervention in refund of investors' money and had accused Sebi of wrongly charging them of non- compliance with a Supreme Court order in this regard.

Sebi had launched prosecution proceedings against Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHCIL), as also their promoter/directors -- Ashok Roy Choudhary, Ravi Shankar Dubey, Vandana Bhargava and Subrata Roy Sahara. The market regulator further said that "as Saharas did not submit the documents as per the order dated August 31, 2012 of the Supreme Court, Sebi has filed contempt application before the Supreme Court."

Sebi issued a letter to the two companies on November 1, 2012 asking them to furnish details of all bank accounts and properties, as they "failed to furnish the documents to the Board within the stipulated time and thereby violated the direction of the Supreme Court".

In the appeal before SAT, the Sahara companies said that Sebi "has deliberately refused to accept the documents/ information and wrongly proceeded on the basis that the appellants are in non-compliance of the directions in the said judgment of the Supreme Court".

The two firms pleaded before SAT that they have also filed a petition before the Supreme Court seeking review of the August 31 judgment.

The appeal said that Sebi be directed to provide the time frame within which the respondent will repay the amount to the OFCD holders and a scheme as to how the regulator proposes to refund the money.

On 29 November, the tribunal, however, said that any further direction in the case can be sought for and granted by the Supreme Court alone and dismissed the appeal.

"We, therefore, find the appeal premature as well as non-maintainable. Dismissed," the Securities Appellate Tribunal (SAT) said in its order passed today.

Passing the order on the appeal filed on November 27, SAT observed that "a contempt petition filed by the respondent Board (Securities and Exchange Board of India) and a review petition filed by the appellants (Sahara group firms) against the order dated August 31, 2012 are already pending before Supreme Court."

The apex court had asked Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund an estimated Rs 24,000 crore with an annual interest of 15 per cent, while Sebi was directed to facilitate the refund of this money to about three crore bondholders of the two firms.

The Supreme Court had asked these companies to furnish the documents related to these investors to Sebi within 10 days and refund the money within three months, failing which the regulator was asked to freeze the accounts and attach properties of the two firms. .

The Supreme Court had also asked Sebi to identify the subscribers who had invested the money on the basis of the two RHPs and refund the amount to them with interest on their production of relevant documents providing payments and after counter-checking the records produced by Sahara firms.

Earlier, Sebi had said in a public notice that it has been receiving "complaints from investors that they are being forced by Saharas/their agents/officials to switch-over their investments to other schemes in Sahara Group Companies like Sahara Q Shop Unique Products Range Ltd, Sahara Credit Cooporative Society Ltd, etc.

"Some investors have also complained that their investments have been switched over to the said schemes of Sahara Group Companies without their consent," Sebi said.

The regulator said that the act of any such person forcing the bondholders of SIRECL and SHCIL to switch over to other schemes of Sahara Group Companies "is not in accordance with the order of the Supreme Court".

Sebi has asked the bondholders to "hold on to the original documents relating to their investments in bonds and produce the same to Sebi when called for and not to yield to any pressure from any person, including Saharas or their agents for converting or switching over their existing investments in the bonds to any of their other schemes like Sahara Q-Shop."

 

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