Apex court reprieve for Sahara; allows company to raise funds

The Supreme Court on Tuesday refused to vacate an Allahabad high court order staying Sebis ban on fund raising by two Sahara group firms

The Supreme Court on Tuesday refused to vacate an Allahabad high court order staying Sebis ban on fund raising by two Sahara group firms Sahara India Real Estate Corporation and Sahara Housing Investment Corporation. However,the apex court said Sebi was entitled to seek all necessary information from the two firms regarding their investors.

We make it clear that Securities and Exchange Board of India (Sebi) is entitled to call for any information which it deem to fit including names of the investors who have invested in OFCDs, the bench headed by Chief Justice SH Kapadia said.

The apex court said,We express no opinion in this case. We direct High Court to dispose off the case expeditiously. However,the bench declined the plea of Sebis council to stay Sahara group companies from raising money from the open market through optionally fully convertible debentures (OFCDs). The investors are very clever nowadays. If they invest then that should be at their own risk, the bench said asking Sebi to bring out an advertisement regarding the ongoing case. The SC also asked the Registrar of Companies to appear before the Allahabad high court and file its reply.

Sebi had moved the Supreme Court against a High Court order staying the market regulator’s ban on a Sahara group firm to raise funds from the public. On December 13,the Allahabad High Court had stayed an order of SEBI restraining Sahara India Real Estate Corporation from accessing public funds.