SEBI orders Sahara firms to refund money raised through OFCDs

Our Bureau Mumbai | Updated on March 12, 2018

The Securities and Exchange Board of India, on Thursday, directed two Sahara group companies, their promoters and directors to refund the money raised through Optionally Fully Convertible Debentures (OFCDs) in 2008 and 2009.

The money collected by the Sahara Group companies — Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) — reportedly amounts to Rs 4,843 crore.

SEBI has asked the companies to refund the money by way of demand draft or pay order with 15 per cent interest.

The promoter, Mr Subrata Roy Sahara, and directors Ms Vandana Bhargava, Mr Ravi Shankar Dubey and Mr Ashok Roy Choudhary have been asked to refund the money jointly and severally.

SEBI said that interest would be calculated from the date of receipt of money till the date of such repayment.

SEBI has banned the Sahara promoter and the directors of the companies from associating themselves, with any listed public company and any public company which intends to raise money from the public, till they pay the OFCD subscribers to SEBI's satisfaction. Both companies have been restrained from accessing the securities market for raising funds, till the time the aforesaid payments are made, the order said.

In November 2010, SEBI had passed an ad interim order restraining SIRECL and SHICL (including the persons named as promoters and directors) from raising funds under the Red Herring Prospectus through these debentures, till further directions.

The Supreme Court (in its May 12, 2011 order) had directed SEBI to “expeditiously hear and decide this case so that the apex court could pass suitable orders on re-opening.” Hence, the SEBI order will be given effect to subject to the directions of the Supreme Court. SEBI will place this order before the apex court so that it can decide on the case.

SEBI directed SIRECL and SHICL to issue public notice, in all editions of two national dailies — one English and one Hindi — with wide circulation providing details of the modalities for refund, details on contact persons including names, addresses and contact details, within 15 days of this order coming into effect.

Published on June 23, 2011

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