SEBI can take anti-Sahara action: SC

Action against Sahara can be taken relating to refund of Rs 24,000 cr raised from investors.

The Supreme Court today sternly told market regulator SEBI to “take action” against Sahara group for failing to comply with its orders relating to refund of Rs 24,000 crore of investors money and getting information about them from its companies.

“Time limit is there for ten days. You take your action. SEBI Act is there. You do whatever you want to do in accordance with the law. You draw inferences from the judgement (of Aug 31),” the bench told the regulator directing it to file status report on compliance of its order.

In its judgement of Aug 31,the Court had made stinging observations against the companies–Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)-for violating rules in raising funds from common investors.

It had said then that such offences must be dealt with “iron hand” and had directed that the SEBI can attach properties and freeze bank accounts of the companies if they failed to refund the money.

A bench comprising justices K S Radhakrishnan and J S Khehar said that it is a clear case of violation of its directions by the companies which have failed to comply with its order to refund the amount and provide documents about the investors to SEBI within the time limit frame by the apex court.

“We have given all directions. What is the consequence of non-compliance is stated in the judgement,” the bench further said.

The bench had on August 31 had directed the companies to refund the amount within a month which expired on September 30 and ten days to furnish informations to SEBI which expired on September 10

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The Judges made it clear that the court was not monitoring the development and would like to have the compliance report about its directions from the SEBI periodically.

“After so many years they did not furnish any thing. You take a decision to take action. You have to take decision in accordance with law. That is the duty of SEBI,” the bench said and added “We are not going to monitor any further and its your job what you want to do. You have to file status report.”

Senior advocate Gopal Subramanium,appearing for the group,submitted that the companies are coordinating with the SEBI and more time is required for complying with its order.

Taking strong exception to his submission,the bench said that taking time more than ten days to furnish all the information to the regulator violates its order.

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“It violates our order. You cannot by consent violate our order,” the bench said and reminded the regulator that its judgement is clear on what it should do if the companies do not comply its order.

The bench also refused to take on record the oral submission made by Sahara group for seeking more time.

“Your arguments are in the air. We cannot hear your submission. You can file application,” the bench said.

In a major setback to the Sahara Group,the apex court had on August 31 directed its two companies to refund around Rs 24,000 crore to their investors within three months with 15 per cent interest per annum.

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The Court had also appointed one of its retired judges Justice B N Aggarwal to oversee the action taken by SEBI against the two Sahara firms.

SIREC had collected Rs.19,400.87 Crs on March 13,2008 and SHICL had collected Rs 6,380.50 Crs. But the total balance on August 31 is Rs 24,029.73 Crs after premature redemption.

The group might have to fork out around Rs 38,000 crore as of now which includes the principal amount of Rs 24,029.73 crore and interest of around Rs 14,000 crore.