Sebi-Sahara case: A saga of big numbers and innocuous names

The case saw staggering numbers like collection of over Rs 24,000 crore from three crore individuals.

Published on:February 28, 2014 5:19 pm

refund to the investors.

Sahara was also asked to deposit details of all investors to Sebi, which was mandated to refund the money after verifying their genuineness.

Sebi again moved the Supreme Court alleging non-compliance by the group to the earlier orders, pursuant to which the apex court passed another order on December 5, 2012, and asked the two firms to deposit the money in three instalments beginning with an immediate payment of Rs 5,120 crore.

While the group paid the first instalment, it failed to meet the deadline for other two payments and rather claimed to have already paid more than Rs 20,000 crore directly to the investors.

Unconvinced with Sahara’s claims, Sebi passed orders on February 13, 2013, to attach bank accounts and other properties of the group and later issued summons for personal appearance of Subrata Roy and other three directors before it.

Roy and others appeared before Sebi on April 10, 2013, after which he famously told reporters that he was not even offered tea by Sebi officials.

During the same month, April 2013, Sebi finally closed its file on Sahara Prime City, whose planned IPO had kick-started this long-running battle.

In the meantime, Sahara group continued to issue full-page and multi-page advertisements in newspapers wherein it claimed to have cleared bulk of its outstanding liabilities to bondholders.

In these advertisements, the group also claimed to have raised total funds to the tune of Rs 2,25,000 crore since inception in 1978 across various businesses and pegged its total net worth at an astonishing figure of Rs 68,174 crore and the size of its assets at Rs 152,518 crore.

Sahara also charged that Sebi was making “baseless allegations” against it and accused it of not accepting “60 truckloads of documents”, while the regulator countered these charges by saying that the documents given by them were “hopelessly mixed up”.

Sebi also issued public notices in newspapers, cautioning investors and general public against dealing with Sahara.

The regulator also asked various financial institutions including banks to freeze all accounts of the group, besides writing to district collectors and other authorities for attachment of land, real estate and other properties.

Similar letters were sent also to the tax department and other agencies like Enforcement Directorate too.

Later, Sebi began an exercise for refund to genuine investors from Rs 5,120 crore deposited by Sahara. However, not much headway appears to have been made in the process as Sebi has detected instances of multiple accounts, on which it has sought a clarity from the Supreme Court.

Following are the key developments:-

September 2009: Sahara Prime City files Draft Red Herring
Prospectus (DRHP)

October 2009: Sahara India Real Estate Corporation Ltd
(SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL)
file Red Herring Prospectus with Registrar of Companies.

December 2009: Complaint received from Professional Group for
Investor Protection against Sahara group for illegalities in
fund raising SIRECL and SHICL

January 2010: Similar complaint received against Sahara group
from one Roshan Lal through National Housing Bank

November 2010: Sebi passes interim order against the two firms

June 2011: Sebi passes final order

October 2011: Securities Appellate Tribunal upholds Sebi order

August 2012: Supreme …continued »

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