Sahara moves SAT, seeks more time to submit OFCD details

Written by feBureau | Mumbai | Updated: Nov 20 2012, 06:03am hrs
In what appears to be a last-ditch attempt to get some breathing space, the Subrata Roy-led Sahara Group has filed an appeal with the Securities Appellate Tribunal (SAT)

to get an extension of deadline for submitting documents related to around 22 million holders of optionally fully convertible debentures (OFCDs).

The appeals filed by Sahara Group companies Sahara India Real Estate Corporation (SIRCL) and Sahara Housing Investment Corporation (SHICL) want the Securities and Exchange Board of India (Sebi) to extend the deadline to January 31, 2013.

Senior counsel Janak Dwarkadas, appearing on behalf of Sahara, said that the deadline is proving to be a difficult task as the documents related to all the investors is running into a few crores and it is not possible to complete the procedures in the next 10 days.

The counsel further argued that it was well within Sebi's rights to extend the deadline.

The latest appeal comes in the wake of the regulator's statement in the Supreme Court last month that the corporate entity is not complying with the deadline set by the apex court. Sebi had argued that the Sahara Group companies missed the September 10 deadline set by the apex court to provide documents relating to millions of investors.

The tribunal bench comprising members PK Malhotra and SSN Moorthy has directed Sebi to submit its reply within two weeks. Interestingly, SAT observed that Sebi should have accepted the documents even if the corporate house was late in submitting them by two or three days.

The duty of the regulator is to protect the interest of small investors, it added.

On August 31, the Supreme Court directed SIRCL and SHICL to refund over R24,400 crore, along with 15% interest, to all depositors within three months (November 30). The court had said that Sebi can even attach the properties and freeze the bank accounts of the companies, if they fail to refund the amount. The cumulative amount is pegged around R40,000 crore.

Sahara, which has interests ranging from media and sports to financial services and housing, had raised the money between 2008 and 2011 through OFCDs, an instrument which allows investors to convert it into shares as an option.

Incidentally, retired Supreme Court judge B N Agrawal, who has been appointed by SC to oversee the compliance of its order, is also believed to have submitted a report citing many instances of non-compliance by Sahara.

The report was submitted in a sealed cover.

The Sahara Group entities are represented by senior counsel Janak Dwarkadas and DSK Legal at SAT, while Sebi is being represented by counsel Prateek Seksaria and Mihir Mody of K Ashar & Co.

Story so far

Nov 2010: Sebi bars two Sahara Group companies from raising funds through OFCDs

Dec 2010: Sahara gets stay order in Allahabad HC

April 2011: Sahara moves SC as Allahabad HC vacates stay order

June 2011: Sebi orders Sahara companies to refund money

July 2011: Sahara appeals in SC; Sahara told to move SAT

Oct 2011: SAT upholds Sebi order

Nov 2011: Sahara challenges Sebi order; SC grants stay

Jan 2012: SC tells Sahara to furnish details of assets

Aug 2012: SC orders Sahara to refund money

Oct 2012: SC says Sebi can act against Sahara if the company does not comply with its order

Nov 2012: Sahara moves SAT, seeking extension of deadline for submitting documents