The Supreme Court has directed the Securities Exchange Board of India (SEBI) to formulate a mechanism to establish the genuineness of investors who purchased Sahara’s debentures, and to begin refunding the money to them. The bench comprising of Justice J.S. Khehar and Justice Radhakrishnan directed SEBI to start making payments to investors whose genuineness has been verified on May 8.
The apex court has also directed Sahara India Real Estate Corp Ltd and Sahara India Housing Investment Corp to file an affidavit listing all their assets to the last detail. These Sahara group companies are facing property attachment proceedings in the case.
The Supreme Court will hear on July 17, SEBI’s plea to initiate contempt proceedings against the two Sahara companies its three directors Vandana Bhargava, Ravi Shankar Dubey, and Ashok Roy Choudhary and Sahara boss- Subrata Roy for not complying with SC’s Aug 31 orders which .
SC on Aug, 31 directed Sahara to deposit the money, collected through optionally fully convertible debentures in 2008-09, to SEBI with 15% interest, and to return the money to investors within 3 months. Sahara was also directed to furnish all documents relating to investors’ validity and deposit the same with Sahara by Sep 10.
Sahara maintained that investors could be refunded with Rs. 5120 crore that it deposited with SEBI as the remaining amount was redeemed by investors before SC’s Aug 31 judgement.
SEBI on Feb 13, ordered freezing and dematerialising all the accounts of the two Sahara companies along with those of Subrata Roy and the three directors.
Sahara moved to Securities Appellate Tribunal (SAT) against property attachment order. Sahara India, another company moved to the Allahabad High Court claiming that it wasn’t a party to the debenture case.
SEBI filed a contempt case against Sahara boss, Subrata Roy his two companies and its three directors after their failure to comply with SC’s August 31 order.
The main conflict in the ongoing issue was that in order to issue Sahara like optionally fully convertible debentures to be issued a company has to be listed which Sahara is not. This is in direct violation of the Companies Act and SEBI regulations.