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Sahara India Pariwar: SEBI’s recent orders overlook facts

Subrata Roy SaharaSebi

Sahara India Pariwar has called out the market regulator SEBI for its order that asked Sahara India Commercial Corporation Ltd (SICCL) to refund a whopping Rs 14,000 crore with an interest rate of 15 per cent per annum, by calling it “against the spirit of natural justice”.

This happened a day after SEBI ordered a Sahara Group company to refund the amount of Rs. 14,000 crore which was raised from public as deposits. Sahara India Pariwar has accused the market regulator of “overlooking the hard facts”, along with throwing light upon the situation prevalent back in 1998 when it issued OFCDs.

For the uninitiated, OFCDs or Optionally Fully Convertible Debentures is a hybrid product which can be converted into shares at the expiry of a certain period at predetermined price, if the investor wishes to do so. According to the Subrata Roy-led Group, its issue was opened on July 6, 1998 when the issue of such securities was not limited to less than 50 people. The Sahara Group insisted that everything was done as per law and after taking all the necessary permissions from the government authorities.

“In 1998, Sahara India Commercial Corporation Ltd (SICCL) had taken a written permission for issuing OFCDs from Registrar of Companies, the Ministry of Corporate Affairs, for the first time. Later, we got two more such permissions in 2009 for Sahara Real Estate and Sahara Housing from the competent authorities. A case is going on in the Supreme Court in this regard,” Sahara India Pariwar said in its official statement.

The Subrata Roy-led conglomerate further stated, “The Supreme Court in its order observed that OFCD issue by SICCL was made in 1998 and it was before the amendment of Section 67(3) by Companies Amendment Act, 2000. Therefore ROC, and not SEBI, had jurisdiction in respect of the said OFCDs.”

According to Sahara India Pariwar, its subsidiary SICCL has discharged most of its OFCD liabilities and hence the order issued by SEBI is “against the observation and conclusion drawn by the apex court.” In its statement, Sahara India Pariwar has also stated that this was the reason that the Supreme Court did not act against SICCL when it was hearing a similar case against two of its subsidiaries.

Sahara India Pariwar has said that SICCL has already discharged all its OFCD liabilities, except for the outstanding Rs. 17 crore OFCD liability towards 54,804 members.  “The TDS deducted on interest paid has been deposited with the income tax department. The order makes it a case of double payment for single liability, which SICCL has already discharged,” the conglomerate stated.

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