SEBI has tightened the noose around the Sahara group. The capital market regulator on Tuesday cancelled the registration of Sahara Mutual for not being a ‘fit and proper’ person.
The average assets managed by Sahara Mutual for the April-June quarter amounted to ₹340 crore.
Sahara MF has been ordered to transfer the activities of Sahara India Financial Corporation Ltd (its sponsor) and its asset management company (Sahara AMC) to a new sponsor and a SEBI approved AMC at the earliest.
SEBI found that group chief Subrata Roy was an associate director on the board of Sahara AMC as per the statement of additional information filed by Sahara AMC on April 1. Based on pending actions against him, SEBI concluded that Subrata Roy and the Sahara group of companies were not a “fit and proper person” in accordance with the mutual fund regulations.”
Failure to complete the transition process within five months would result in compulsory redemption of the units and funds will be credited to investors, SEBI said.
Sahara MF has been ordered not to take any new subscriptions, including from existing investors.
The Sahara group has been fighting legal battles with SEBI and the courts. The Apex Court ordered refund of ₹24,000 crore by two Sahara entities in 2010. Roy has been in jail since the last 18 months.