Sebi vs Sahara: Sebi likely to probe Sahara on fund raising

Sebi has been given the green signal to proceed with in inquiry against two Sahara group companies for fund raising without consent from Sebi. The Allahabad high court has vacated its interim stay on the Sebi inquiry. CNBC-TV18’s Sajeet Manghat shares details of the development.

Sebi has gone ahead and approached the Lucknow bench of the Allahabad High Court to vacate the interim stay that it had put on its November 24 order that prevented Sahara Group Companies — Sahara India Real Estate Corporation and Sahara India Housing Corporation from raising money through optionally fully convertible debentures (OFCDs). These two companies together were raising huge amount of money from the market and Sebi in its initial investigation mentioned the fact that it tantamount to raising money from public without Sebi’s nod and so it asked Sahara to stop doing that.

Sahara went to the Lucknow Court to seek a stay on the Sebi order and it did get a interim stay which was then challenged by Sebi to a special petition in Supreme Court (SC). In January this year, SC said that Sebi is entitled to seek any information whether it is regarding investors or any other information and Sahara should comply by it. It has been a few months and Sebi has again gone back to the Lucknow bench on April 5. It has stated that Sahara hasn’t complied with the SC directive of any information. The Lucknow bench has said that any information that Sahara has already supplied Sebi as part of the inquiry cannot be taken as information in the eyes of law. Hence, Sahara has not complied with SC directive in principle. It is the reason why it has vacated the entire writ petition which was filed by Sahara in the Lucknow bench.

It paves the way for Sebi to go ahead with inquiry and it now allows Sebi to come out with a final order for Sahara. Sahara is one of the companies whose IPO, Sahara Prime IPO, is pending clearance from Sebi. Hence, it is going to be a wait and watch game now — whether Sebi comes out with final order against the Sahara Group Companies from raising funds because the order was primarily against Subrato Roy and promoters of Sahara Group and not per se against Sahara Prime as in November last year.

Source: www.moneycontrol.com

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