SC dismisses Sahara appeal for more time to refund investors

Feb 26 2013, 01:40 IST
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SummaryThe Sahara Group’s last hope for an extension to refund R24,000 crore to investors by submitting the relevant documents with the Securities and Exchange Board of India failed, with the Supreme Court on Monday rejecting its plea for more time to comply with its December 5 order.

and three directors — Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava — for non-compliance with its directions to refund R24,000 crore raised from investors through optionally fully convertible debentures (OFCDs) by November 30 last year.

It had also pulled up Sebi for failing to take action against the companies – Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation Ltd) and Sahara Housing Investment Corporation – as per its August 31, 2012 directions that ordered attachment of properties and freezing of bank accounts of the companies in case of any default.

After the February 6 order, Sebi on February 13 ordered the freezing of the assets and bank accounts of two Sahara group companies, saying they had failed to obey a Supreme Court order to repay investors in a case involving more than Rs 24,000 crore. Around 100 bank accounts of the group were affected by the order.

The market regulator had also ordered freezing all bank accounts and properties in the name of Roy and three other directors of the two firms. The assets ordered to be attached included those related to the group’s Aambey Valley resort town near Pune, other real estate assets in Delhi, Mumbai and at other places across the country, shares, mutual funds and various other investments.

Last week, Sebi cautioned investors and the general public against transacting with Sahara companies or persons associated with these companies. “Anyone transacting with them (Sahara India Real Estate Corp, Sahara Housing Investment Corp and their three promoters and directors) would be doing so at their own peril,” it said.

In a statement issued after the Sebi order, Sahara said the directives were based on “old facts” and had not taken into account redemptions it had made since January 2012. Besides, the group said that its total liability was unlikely to exceed the Rs 5,120 crore it had deposited with the regulator. It added that the orders for attaching assets of individuals are “incorrect”.

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