The Supreme Court today, July8, rejected the Sahara Group’s plea to issue a notice to the government in connection to its dispute with market regulator SEBI, which had directed the firm to return funds raised from investors under an OFCD scheme along with 15 per cent interest.
“We do not want Union of India (government) to come at this stage. Let them (SEBI) come and clarify. We have our own query on it,” said the bench headed by the Chief Justice S H Kapadia.
During today’s proceedings, senior advocate Fali S Nariman, appearing for the Sahara Group, said that Sahara was not a listed company and only the government has jurisdiction over it and not market regulator SEBI.
“We (Sahara) are not a listed company and the Government ( Ministry of Corporate Affairs) has jurisdiction over us. If there is any listed company, then SEBI has jurisdiction,” he said, asking the bench to issue a notice to the government seeking a clarification of its stance. Narimnan said that despite the matter was pending in the court, Sebi issued fresh cause notice to the group and passed the order.
However, the bench said,” We have asked the SEBI to explain it. We wanted to know that from where you got this (concept of) OFCD.” The Supreme Court further said that it had asked SEBI as “We wanted investors to be protected.”
The bench later adjourned the matter for a week on the request made by SEBI’s counsel P Venugopal. SEBI submitted that Sahara Group has filed some documents before it and the regulator wanted to go through it.
In November, SEBI had indicated that two Sahara Group firms — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — were raising funds from the public through an optionally fully convertible debentures (OFCD) scheme without conforming to prudent disclosure and other investor protection norms.
Subsequently, Sahara Group had contested SEBI’s authority to look into the issue in the Supreme Court, asserting that it was a privately held company and not listed and therefore, was under the jurisdiction of the Ministry of Corporate Affairs.
Earlier, on June 27, a vacation bench of the apex court, comprising justices P Sathasivam and A K Patnaik had declined to hear the plea of Sahara India Real Estate Corp and asked to list it before the Chief Justice which has been hearing the case.
Following the orders of the Supreme Court, the Security and Exchange Board of India had on June 23 passed an order and directed the two Sahara group firms – Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — to refund the money raised by them in OFCD citing violation of regulatory norms.
