Sahara fails to comply with SC orderhttps://indianexpress.com/article/news-archive/web/sahara-fails-to-comply-with-sc-order/

Sahara fails to comply with SC order

Sahara has not been able to provide evidence of making premature redemption to depositors.

The Sahara group companies have not been able to provide evidence to the Securities and Exchange Board of India (Sebi) about having made premature redemption of Rs 1,744 crore to its depositors.

The companies,Sahara India Real Estate Corporation and Sahara Housing Investment Corporation,were supposed to provide documentary evidence to the market regulator within 10 days of the Supreme Court judgment asking them to refund Rs 17,400 crore with a 15 per cent penal interest to subscribers of its convertible debentures.

The sum related to the accounts of about 70,000 investors who the company claimed to have died. The two companies have asked the regulator to give it some more to provide the details,which the Sebi has declined. The regulator will now revert to the apex court for directions on whether the sum should be added to the court order.

“Saharas are directed to furnish all documents in their custody,particularly the application forms submitted by subscribers,the approval and allotment of bonds and all other documents to Sebi so as to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited,within a period of 10 days from the date of pronouncement of this order,” the court order said.

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The SC has ordered the Sahara conglomerate to refund Rs 17,400 crore,along with 15 per cent interest,which it had raised from 2.2 crore small investors,reaffirming an earlier order from the regulator.

The apex court had ordered Sebi to take steps with the aid of investigating agencies and experts in finance and accounts to examine the documents produced by Sahara so as to ascertain their genuineness. It had also asked Sebi to identify subscribers who had invested the money on the basis of Red Herring Prospectus and refund the amount with interest on their production of relevant documents.

The court has appointed Justice BN Agrawal,a retired SC judge,to oversee the compliance of its order.

Sahara,which has interests ranging from media and sports to financial services and housing,had raised over Rs 17,400 crore between 2008 and 2011 through OFCDs (optionally fully convertible debenture),an instrument which allows investors to convert it into shares as an option.

The case

The group has not been able to provide evidence to Sebi about having made premature redemption of Rs 1,744 crore to depositors

The sum relates to accounts of about 70,000 investors who the company claimed to have died. The two companies asked Sebi to give it more to provide details,which the regulator declined Sahara India Real Estate Corporation and Sahara Housing Investment Corporation were to provide documentary evidence to Sebi within 10 days of the Supreme Court judgment

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