Buy with Amazon

Friday, February 28, 2014

SEBI VS Sahara


SEBI VS Sahara Case Study in Details

Sahara Group companies SIRECL (Sahara India Real Estate Corporation Limited) and SHICL (Sahara Housing Investment Corporation Limited) floated OFCDs (Optionally Fully convertible Debentures’) from 25th April 2008 up to 13th April 2011. Meanwhile the company collected about Rs. 17,656 crore from 30 million Investors without complying with the requirements applicable to the public offerings of securities.

On Dated 24th Nov. 2010 SEBI barred Sahara co’s on raising funds from equity market and issuing any equity. On Dated 26th Nov. 2010 Sahara Chief Subrata Roy moves Allahabad HC against SEBI and HC gives result in favor of Sahara. On Jan 4 SEBI Moves Apex court against Sahara by saying that Sahara can raise funds but SEBI has right to seek information about Investors. On Jan. 8, 2011 SEBI issued public notice and warned investors of Sahara 2 co.s.
On Jan.19, 2011 RBI has warned investors against putting money in Sahara group companies’ deposits in Public notice by saying that the central bank said it had got complaints from some individuals  that the Sahara group have been mobilizing deposits from the public under the name of Sahara Pariwar and Sahara India Pariwar.
On 10th May 2011 SC asked Sahara India Real Estate Corporation to produce the list of agents employed during fund raising. On12th May 2011 Sahara firm which has raised Rs 4843 crore using OFCDs gets notice from SC  why they used third-party account during fund raising.

On 23rd June 2011 SEBI directed Sahara co.s to refund that amount collected to investors as they are not allowed to collect money from investors. Sahara chief Subrata Roy decided to before SAT against the order of SEBI and after hearing the SAT confirmed and maintained the order of the SEBI by an order dated 18th October, 2011.
 Subsequently Sahara filed an appeal before the Supreme Court of India against the SAT order
On 10th Jan 2012 during interrogation it has been found that Two Sahara group firms have invested a significant portion of the money raised through the issue of OFCDs in Aamby Valley, a luxury township project developed by the group in Maharashtra.
The Supreme Court on 31st August, 2012 directed the Sahara Group and its two group companies SIRECL and SHICL to refund around Rs 24000 crore to their 30 million investors within 3 months from the date of the order with an interest of 15%.
The Supreme Court confirmed the findings of the SAT has further asked SEBI to probe into the matter and find out the actual investor base who have subscribed to the Optionally Fully Convertible Debentures (OFCDs) issued by the two group companies SIRECL and SHICL.
On asking for proof Sahara sent 127 trucks containing 31,669 cartons full of over three crore application forms and two crore redemption vouchers to Sebi office. This apparently resulted into a huge traffic jam on outskirts of Mumbai, where the regulator is headquartered.
On 24th Oct 2012 SEBI floated a tender to handle data sent by Sahara group in trucks of 30 million investors with applications of 300 millions. Cost of such a huge project was 100 crore as SEBI wants to remove the burden of handling such a huge data for the 1st time. On Oct 27, 2012 SEBI issued a notice by saying that doesn’t invest in Sahara Q-shop. On Nov 2012 SEBI decided to take help from PSU Banks and KYC agencies to help in handling data of 3 crore people.
On December 5, 2012 the court gave additional time to Sahara group and asked it to make an immediate payment of Rs 5,120 crore, followed by Rs 10,000 crore by the first week of January and the remainder by the first week of February.
As per Sebi, the SIRECL has raises 6380 crore and
 SHCIL had raised Rs 19,400 crore respectively from bond holders.

On 26th Feb. 2014 hearing as everyone aware that Non bailable warrants has been issued and for the same on 1st March 2014 Lucknow Police arrested Subrata Roy upto 4th March 2014.
From above details about SEBI VS Sahara case lesson is learnt that there are enough loopholes in the jurisdiction of various authorities and SEBI and Market Regulators have to take timely action to prevent investors to fall in trap and also investors must be aware enough so that they could not fall into such schemes. Whatever may the result of that case but enough steps required from govt. to avoid such circumstances as Investors are still sufferers and they will have to face burnt during that hearing as their money isn’t returned to them at all.


at

SEBI VS Sahara


SEBI VS Sahara Case Study in Details

Sahara Group companies SIRECL (Sahara India Real Estate Corporation Limited) and SHICL (Sahara Housing Investment Corporation Limited) floated OFCDs (Optionally Fully convertible Debentures’) from 25th April 2008 up to 13th April 2011. Meanwhile the company collected about Rs. 17,656 crore from 30 million Investors without complying with the requirements applicable to the public offerings of securities.

On Dated 24th Nov. 2010 SEBI barred Sahara co’s on raising funds from equity market and issuing any equity. On Dated 26th Nov. 2010 Sahara Chief Subrata Roy moves Allahabad HC against SEBI and HC gives result in favor of Sahara. On Jan 4 SEBI Moves Apex court against Sahara by saying that Sahara can raise funds but SEBI has right to seek information about Investors. On Jan. 8, 2011 SEBI issued public notice and warned investors of Sahara 2 co.s.
On Jan.19, 2011 RBI has warned investors against putting money in Sahara group companies’ deposits in Public notice by saying that the central bank said it had got complaints from some individuals  that the Sahara group have been mobilizing deposits from the public under the name of Sahara Pariwar and Sahara India Pariwar.
On 10th May 2011 SC asked Sahara India Real Estate Corporation to produce the list of agents employed during fund raising. On12th May 2011 Sahara firm which has raised Rs 4843 crore using OFCDs gets notice from SC  why they used third-party account during fund raising.

On 23rd June 2011 SEBI directed Sahara co.s to refund that amount collected to investors as they are not allowed to collect money from investors. Sahara chief Subrata Roy decided to before SAT against the order of SEBI and after hearing the SAT confirmed and maintained the order of the SEBI by an order dated 18th October, 2011.
 Subsequently Sahara filed an appeal before the Supreme Court of India against the SAT order
On 10th Jan 2012 during interrogation it has been found that Two Sahara group firms have invested a significant portion of the money raised through the issue of OFCDs in Aamby Valley, a luxury township project developed by the group in Maharashtra.
The Supreme Court on 31st August, 2012 directed the Sahara Group and its two group companies SIRECL and SHICL to refund around Rs 24000 crore to their 30 million investors within 3 months from the date of the order with an interest of 15%.
The Supreme Court confirmed the findings of the SAT has further asked SEBI to probe into the matter and find out the actual investor base who have subscribed to the Optionally Fully Convertible Debentures (OFCDs) issued by the two group companies SIRECL and SHICL.
On asking for proof Sahara sent 127 trucks containing 31,669 cartons full of over three crore application forms and two crore redemption vouchers to Sebi office. This apparently resulted into a huge traffic jam on outskirts of Mumbai, where the regulator is headquartered.
On 24th Oct 2012 SEBI floated a tender to handle data sent by Sahara group in trucks of 30 million investors with applications of 300 millions. Cost of such a huge project was 100 crore as SEBI wants to remove the burden of handling such a huge data for the 1st time. On Oct 27, 2012 SEBI issued a notice by saying that doesn’t invest in Sahara Q-shop. On Nov 2012 SEBI decided to take help from PSU Banks and KYC agencies to help in handling data of 3 crore people.
On December 5, 2012 the court gave additional time to Sahara group and asked it to make an immediate payment of Rs 5,120 crore, followed by Rs 10,000 crore by the first week of January and the remainder by the first week of February.
As per Sebi, the SIRECL has raises 6380 crore and
 SHCIL had raised Rs 19,400 crore respectively from bond holders.

On 26th Feb. 2014 hearing as everyone aware that Non bailable warrants has been issued and for the same on 1st March 2014 Lucknow Police arrested Subrata Roy upto 4th March 2014.
From above details about SEBI VS Sahara case lesson is learnt that there are enough loopholes in the jurisdiction of various authorities and SEBI and Market Regulators have to take timely action to prevent investors to fall in trap and also investors must be aware enough so that they could not fall into such schemes. Whatever may the result of that case but enough steps required from govt. to avoid such circumstances as Investors are still sufferers and they will have to face burnt during that hearing as their money isn’t returned to them at all.