HC seeks probe into Sahara, JVG

NEW DELHI, Aug 13: The Delhi High Court today restrained Sahara India, Kuber and the JVG group from disposing off their properties and di...

NEW DELHI, Aug 13: The Delhi High Court today restrained Sahara India, Kuber and the JVG group from disposing off their properties and directed the Reserve Bank of India (RBI) to file a financial status report of these firms by August 21.

The court issued notices to Securities and Exchange Board of India, the Department of Company Affairs (DCA) and the Monopolies and Restrictive Trade Practices Commission for their alleged failure to monitor the companies.

Acting on a petition filed by Public Action Forum, Justice Anil Dev Singh also issued notices to the cabinet secretary, finance secretary, CBI director the law and company affairs secretary, chairman of the Central Board of Direct Taxes (CBDT), Commissioner of Income Tax and state governments of Delhi, Uttar Pradesh and Madhya Pradesh.

Story continues below this ad

The forum contended that these companies were indulging in fraudulent business practices and pleaded that they be debarred from raising fresh investments or deposits till they were cleared by the RBI, SEBI and theCompany Law Board (CLB).

They also demanded investigation against officials of the RBI and SEBI who handled the case of Kuber, JVG and Sahara group of companies. Companies to which notices were issued include Sahara India Financial Corporation, Sahara India Airlines, Sahara India Savings and Investments, JVG Finance, JVG Departmental Stores, JVG Consumer Products and the official liquidator of the JVG group.

The court asked Hoffland Finance, Hoffland Investment, Arihant Credit Capital, Crystal Credits Corporation, Rapti Growth Fund, Krishi Export Commercial Corporation and Kuber Mutual Benefits to file their replies by August 21, the next date for hearing.

The petitioner alleged that RBI, SEBI and CLB had not taken any action to check what it called the irregular trade practices and violation of law by these companies. The forum contended that as many as 20 non-banking finance companies (NBFCs) including the respondents collected approximately Rs 9,000 crore which was at the risk of total loss.

Story continues below this ad

Theysought court’s direction to RBI, SEBI and CLB to locate the funds diverted by promoters of these companies and submit periodical reports to the court.

The forum prayed that these companies should be directed not to raise any fresh funds until RBI completes its investigation and gives them clearance. They said RBI, SEBI and CLB should also be directed to complete these investigations within a specific time frame and progress report should be filed before the court from time to time.