Economy

‘SEBI can seek fund-raising details from Sahara cos’

PTI New Delhi | Updated on January 04, 2011 Published on January 04, 2011

The Chief Justice of India, Mr S.H. Kapadia   -  The Hindu

A Bench headed by Chief Justice, Mr S.H. Kapadia, said that SEBI can call for information from the two Sahara group firms regarding their investors.

The Supreme Court said on Tuesday that SEBI was entitled to seek all necessary information from two Sahara group firms on how resources were being raised but refused to stay the companies’ ongoing fund—mopping exercise.

The apex court was hearing the market regulator’s petition against an Allahabad High Court order staying SEBI’s ban on two Sahara group firms — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — from raising funds from the public through OFCDs (Optionally Fully Convertible Debentures).

A Bench headed by Chief Justice, Mr S.H. Kapadia, said that SEBI can call for information from the two Sahara group firms regarding their investors.

“We make it clear that the Securities and Exchange Board of India (SEBI) is entitled to call for any information which it deem to fit including the names of the investors who have invested in OFCDs,” the Bench said.

The apex court further said: “We express no opinion in this case. We direct the High Court to dispose off the case expeditiously.”

However, the Bench declined the plea of SEBI’s council to stay the Sahara group companies from raising money from the open market through OFCD.

“The investors are very clever now-a-days. If they invest then that should be at their own risk,” the Bench said asking SEBI to bring out an advertisement regarding the ongoing case.

The Supreme Court also asked the registrar of companies to appear before the Allahabad High Court and file its reply in this matter.

On Monday, SEBI had moved the Supreme Court against a High Court order staying the market regulator’s ban on a Sahara group firm to raise funds from the public.

Earlier on December 13, the Allahabad High Court had stayed an order of SEBI restraining Sahara India Real Estate Corporation from accessing public funds.

In its petition, the Sahara group firm had challenged the order of SEBI restraining the two entities and promoters, including the Chairman, Mr Subrata Roy, from accessing the market for non—disclosure of information.

SEBI had also said that there was a need for lifting the veil on corporate fund-raising.

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Published on January 04, 2011
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