In a jolt to the Sahara Group,the Supreme Court on Friday ordered two of its companies to refund Rs 24,000 crore,along with 15 per cent interest,to more than two crore small investors who had invested in their optionally fully convertible debentures (OFCDs) between the years 2008 and 2011.
Holding Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation Ltd) and Sahara Housing Investment Corporation legally liable to pay back the money in three months,the court ruled that Saharas violated the listing provisions and collected huge amounts from the public in disobedience of law.
The Sahara group could end up paying Rs 38,000 crore which will include the principal amount of Rs 24,000 crore and interest of Rs 14,000 crore.
The bench of Justices K S Radhakrishnan and J S Khehar asked the Securities and Exchange Board of India (SEBI) to examine issues relating to the genuineness of investors and refund,while also giving it the liberty to attach the companies properties and freeze their bank accounts,besides other legal actions,if they failed to refund.
It also appointed retired Supreme Court judge Justice B N Aggarwal to oversee the action taken by the markets regulator.
The Sahara companies had moved the apex court against orders by SEBI and the Securities Appellate Tribunal (SAT) passed last year. The SEBI indicted them for raising funds from the public through the OFCD scheme without adhering to prudent disclosure and other investor-protection norms governing such public issues.
The SAT subsequently upheld this order while brushing aside the objection over SEBIs jurisdiction to regulate OFCDs and also to regulate their hybrid securities. Sahara had taken the stand that SEBI had no jurisdiction over unlisted public companies and only the Ministry of Corporate Affairs could regulate them.
The apex court,however,found favour with SATs views. It ruled that SEBI will have the powers to regulate their affairs since money collected by them through OFCDs were from the public at large and it would amount to collection of money by way of issue of securities.
Hours after the ruling,the Sahara Group issued a statement blaming incorrect facts and negative perception before the court as the reason for the setback.
We shall never blame the respected Judges of Honble Courts of our beloved country. However,it is the fault of the machinery,which presents the facts incorrectly. And in such a manner so as to create a false and negative perception to convince the Honble Courts that Sahara has collected unbelievably large sums of money from public which are actually ill-gotten and fictitious, the release stated.
Complaining that Sahara had been at the receiving end from various authorities for the last 7-8 years,the statement claimed that the authorities concluded whimsically and without any verification that deposits and investments received by Sahara were fictitious and bogus.
Each and every rupee we have accepted in last 33 years is always against receipt from the company and with an application form duly signed by the honble depositors/investors. Every rupee which has come to Sahara can be verified by the authenticity of the depositors/investors, it said.
Sahara assured investors that there would not be any delay in payment commitment. Saying they were not escapists,Sahara said they would fight the system.