Tag Archives: Sahara India Real Estate

SAT asks Sahara to file an affidavit on capital collection

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Sahara homes, Sahara India Real Estate, Subrata RoyThe Securities Appellate Tribunal (SAT) on Wednesday, September 7, asked Sahara to file an affidavit explaining the method by which entities of the group had raised thousands of crores of rupees from investors through convertible instruments.

The group is expected to file the affidavit within two days of the hearing.

Sahara India Real Estate and Sahara Housing Investment had raised money from the public by issuing a hybrid instrument, known as optionally fully convertible debentures. The issue of these interest-paying debt instruments, which can be converted into equity shares later, was allegedly in violation of the Companies Act and regulations of the Securities and Exchange Board of India (SEBI).

In an order passed in June 2011, the stock market regulator had asked Sahara, which had raised money from the public in violation of regulations, to refund the money with 15% interest.

The two companies were restrained from accessing the capital markets, even as Sahara promoter Subrata Roy Sahara and three directors were restrained from associating with a publicly listed company or any company looking to raise money from the public.

Sahara appealed against the order in the Supreme Court, which redirected the appeal to SAT.

The tribunal on Wednesday sought additional details from the company. The affidavit has to state how much money has been collected, how many people it has been collected from and the mode adopted for the collection.

The tribunal said the material significance of the information is uncertain, but transparency remains important. “We want to know what exactly happened, how did you manage to get 66 lakh investors?” asked the tribunal.

Previously, Sahara had questioned SEBI’s authority in passing an order against an unlisted company making what it said was a private placement of securities.

SAT to take up Sahara plea against SEBI on Tuesday

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Sahara homes, Sahara India Real Estate, Subrata RoySecurities Appellate Tribunal (SAT) will take up petitions by two Sahara group companies, Sahara India Real Estate and Sahara Housing Investment Corp, challenging a Securities and Exchange Board of India (SEBI) order against them, on Tuesday, August 16. The Union Ministry of Corporate Affairs will also be a party.

SAT is expected to hear the case on a continuous basis, since it had been asked by the Supreme Court to hear the petitions and pass an order within five weeks of the appeal. One week has already lapsed.

Senior advocate Arvind P Datar is likely to appear for SEBI, while DSK Legal Advisors are likely to represent Sahara, according to sources. Datar had represented SEBI at the SC when the regulator had challenged an Allahabad High Court order earlier this year on the issue. Satish Kishanchandani of DSK had represented Sahara before the media after the latest SC judgement. Neither counsel was available for comment.

On July 15, the apex court had directed the Sahara group to approach the tribunal against the SEBI order, which had asked the two companies to refund money collected by issuing debentures to the public. It had given three weeks for Sahara to appeal and five weeks thereafter for SAT to hear the case and pass an order.

Earlier, in June, in the biggest refund order in its two-decade history, SEBI had directed the two companies to refund at least Rs.6,588 crore collected under their debenture schemes to investors. SEBI had said the schemes were illegal.

Sahara filed its appeal on August 5, arguing that SEBI rules did not apply to the debenture issue, since it did not intend to list. The Supreme Court had directed SEBI to “expeditiously hear and decide this case” on May 12, in the interest of 6.6 million investors in these schemes.

Sahara Commodity Services (earlier known as Sahara India Real Estate Corp) and Sahara Housing Investment had started raising money by issuing optionally fully convertible debentures (OFCDs) in March 2008 and September 2009, respectively. According to a filing by one of these firms in November 2009, about Rs.6,588 crore was raised.

SEBI, while going through a prospectus filed by another group firm, Sahara Prime City Ltd, for an Initial Public Offer, found this money raising through OFCDs to be in violation of its public issue norms.

It banned these entities from raising money in November 2010. Sahara had challenged this interim order in the Allahabad HC and later in the SC, leading to the May 12 order by the apex court.

The 99-page SEBI order from member K M Abraham held the Sahara group promoter, Subrata Roy Sahara, and three directors of the said companies, Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary, jointly liable for such refund.

In a letter to the Prime Minister, Abraham had later alleged the Finance Ministry was putting pressure on SEBI to be lenient on some cases, including that of Sahara.

SC to hear Sahara plea against SEBI order today

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Sahara homes, Sahara India Real Estate, Subrata RoyThe Supreme Court will today hear the Sahara group firm’s plea against the SEBI order to return the money, along with 15 per cent interest, collected from investors through its Optionally Fully Convertible Debentures (OFCD) scheme.

The plea would be heard by a three-member bench headed by Chief Justice S H Kapadia. 

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, who has been hearing the case. 

Following the orders of the Supreme Court, the Security and Exchange Board of India (SEBI) had on June 23 directed the two Sahara group firms, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, to refund the money, along with 15 per cent interest, raised through OFCD scheme for violating regulatory norms.

As per SEBI order, the two companies, promoter Subrata Roy Sahara and directors Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary jointly and severally, shall refund the money.

Besides, the regulator has also restrained the entities from accessing the securities market for raising funds, till the time payments are made to the satisfaction of the SEBI.

However, on May 12, the apex court had said that the SEBI directive would not take effect till its further order.

During the last hearing on May 12, the Apex Court had asked SEBI to proceed with its probe into Sahara group’s OFCD scheme by observing that investors may not have any knowledge about these products and might feel cheated like in the Harshad Mehta scam.

The court had also allowed the Allahabad High Court to proceed with its hearing, where the Sahara group has challenged SEBI’s direction to give details of its investors.

SEBI directs Sahara firms to refund investors

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, Mumbai Real Estate, India Property, Delhi NCR real estate, Bangalore Real Estate, Track2Media, Track2Realty, ravi sinha, Sahara homes, Sahara India Real Estate, Subrata RoyIndia’s capital market regulator Securities and Exchange Board of India (SEBI) on Thursday directed two Sahara group firms Sahara Commodity Services Corp. Ltd (earlier known as Sahara India Real Estate Corp. Ltd or SIRECL), Sahara Housing Investment Corp. Ltd (SHICL), their promoter Subrata Roy and the directors of two firms to immediately refund the money collected through sales of optionally fully convertible debentures (OFCDs) with annual interest of 15%.

SEBI’s order follows a 12 May Supreme Court direction and will come into effect after the apex court ratifies it. In November, SEBI had barred the two firms from raising public money in any manner, citing violations of capital-raising norms and certain sections of the Companies Act.

On Thursday, SEBI directed the entities to refund the money to the OFCD subscribers in cash and restrained the two firms from accessing the capital market till the repayment.

The SEBI order also restrained Roy and the directors of the two firms—Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary—from associating “with any listed public company and any public company which intends to raise money from the public” till the repayments are completed.

The order requires the two firms to file a certificate of completion of all repayments with SEBI from two independent chartered accountants. If the companies fail to do so, SEBI will take “appropriate action, including launching of prosecution proceedings…in accordance with the law”, the order said.

SEBI has found that OFCDs raised by the two firms are “in effect no different from deposits from the public, except that they come with an ‘option to convert’ appended to it…it seems that under the guise of OFCDs, the two companies are extensively taking up parabanking activities and running deposit schemes”.

Supreme Court dismisses Sahara plea against SEBI

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SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Mumbai Real Estate, India PropertyThe Securities and Exchange Board of India (SEBI) can examine financial instruments used by two companies of the Sahara Group to raise money from the public after India’s top court dismissed its petitions on Thursday.

Sahara India Real Estate Corp. Ltd and Sahara Housing Investment Corp. Ltd are fighting the capital markets regulator on the issue of optionally fully convertible debentures (OFCDs) being used to collect funds from investors.

Thursday’s court order means that SEBI can determine the nature of OFCDs and whether Sahara was using them in a legitimate manner to bring in investor money.

Although the court restricted itself to directing SEBI to investigate the issue, it criticized Sahara’s method of operating, likening it to that of the late Harshad Mehta, the broker at the centre of the securities scam of 1992.

“Investors are not aware of OFCD. At the end of the day, they would come and say that they were cheated,” said the three-judge bench led by Chief Justice S.H. Kapadia. “In Harshad Mehta’s case, the same modus operandi was there. Investors were not aware of the scheme.”

Upon perusing Sahara’s forms and documentation used to raise the money, the court barraged Sahara’s three senior counsels with questions.

Abhishek Manu Singhvi, one of Sahara’s lawyers, requested the court to allow the proceedings before the Allahabad high court to conclude before passing any orders.

The court did not agree and said SEBI should proceed. “Till today I don’t know what is OFCDs. Let SEBI decide. It is an expert body. Let them lay down the law…. We want to know on what basis you (Sahara) are collecting these investments,” Kapadia said. The court then clarified that SEBI’s findings would not affect Sahara’s ongoing case in the high court.

According to a June 2009 filing, Sahara India Real Estate and Sahara Housing Investment had raised Rs.4,843 crore by issuing OFCDs to investors under three schemes—Abode Bonds (Rs.1,385 crore), Nirman Bonds (Rs.1,980 crore) and Real Estate Bonds (Rs.936 crore). SEBI says these are in violation of public issue norms laid down under the Companies Law and the SEBI Act.

Sahara realty gets notice for using third-party account

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Sahara homes, Sahara India Real Estate, Subrata Roy, Delhi NCR real estate, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, India PropertySahara group companies, Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation, which has raised Rs.4,843 crore by issuing optionally fully convertible debentures (OFCDs), is not using its own bank account to handle this money.

In March, the Registrar of Companies (RoC), Uttar Pradesh and Uttarakhand, based in Kanpur, sent a notice to Sahara India Real Estate Corp for using a third party’s bank accounts to receive funds from investors.

This followed a complaint by an investor. The OFCDs issued are known as housing bonds. The debentures were issued by Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation. The cheques were received in the name of “Sahara India”.

According to the complainant, the investors put money in Nirman Bonds and Real Estate Bonds. As instructed by the agents, they issued cheques in favour of “M/s Sahara India”. When they got the receipts, they realised these had been issued in the name of a third party.

“The cheque was taken in the name of Sahara India. However, the receipts have been issued by a third company. Is this action approved by the Registrar of Companies?,” the investor asked in his complaint.

In a written response dated April 19, 2011, Sahara India Real Estate Corp told the registrar that “Sahara India Real Estate Corporation, through an agreement with M/s Sahara India, has agreed to utilise infrastructure, including bank accounts and other services, of the firm for private placement of optionally fully convertible debentures.”

The company said this did not attract action under Section 297 of Companies Act, 1956, as no director of the company was an interested party as a partner in Sahara India.

However, neither the application forms nor the receipts mention this agreement, keeping investors in the dark. According to legal experts, this is prima facie a wrong practice and may lead to misuse of funds by the third party, impacting the interests of investors.

The case is scheduled to come up on Thursday. The Supreme Court has asked Sahara to submit a list of agents and the formats of application forms it has been using to raise money through debentures.

According to Sahara India Real Estate’s submission, the company has 6.6 million investors. SEBI guidelines clearly specify that any issue of equity or debt to more than 49 people is governed by the Issue of Capital and Disclosure Requirements norms.

SEBI mandates safeguards like appointment of dedicated bankers to handle public issues. Also, subscription funds are to be held in an escrow account during the period of allotment of shares before being transferred to the company’s account.

SEBI has issued an order banning Sahara from raising money through OFCDs for violating public issue norms.

Supreme Court to hear Sahara plea against SEBI today

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Sahara homes, Sahara India Real Estate, Subrata Roy, Delhi NCR real estate, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, India PropertyThe Supreme Court will today, May 9, hear Sahara Group’s petition against the orders of the Allahabad High Court, which directed the company to share with market regulator SEBI details of investors participating in its fund raising exercise.

The matter will be heard by a 3-judge bench, headed by Chief Justice S H Kapadia. On May 2, the apex court had adjourned the matter for a week after the group’s investment arm Sahara India Real Estate Corporation sought time to file documents.

The High Court had dismissed Sahara Group plea to vacate its earlier order, which allowed SEBI to collect information on two of its Optionally Fully Convertible Debentures (OFCDs) schemes.

On April 29, the court said the group had not complied with its order to provide the required information for SEBI. “A person, who comes to the court, is supposed to come with clean hands and has to abide by the orders passed by the court, more so in a case where the parties counsel agree for certain action to be undertaken. If some assurances is given by any person to the court, as has been done in the present case and the said assurance/undertaking is not honoured, the court would not come to his rescue,” the High Court had said rejecting Sahara’s plea.

It was not satisfied with the company’s stand that it has handed over two CDs to Securities and Exchange Board of India (SEBI) and said, “It would not pursue us to recall our order”. SEBI had submitted before the High Court that the CDs had incomplete information.

“The information given was obviously incomplete, but even then it was pressed on behalf of the petitioner (Sahara) that they have given the required information, which cannot be said to be bonfire act on their part for compliance of the court’s order,” the court said.

Two entities of Sahara Group — Sahara India Real Estate Corporation Limited and Sahara Housing Investment Corporation Ltd — were raising money from investors through OFCDs. Market regulator SEBI had asked Sahara to share investor details, which was opposed by Sahara.

SEBI meets Sahara in Court on May 17 now

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Sahara homes, Sahara India Real Estate, Subrata Roy, Delhi NCR real estate, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, India PropertyThe Sahara-Securities and Exchange Board of India (SEBI) legal battle seems to be heading to a verdict now. The Lucknow bench of the Allahabad High Court heard the arguments of Sahara and SEBI counsels over the past three days and had adjourned the hearing to May 17.

According to lawyers, the arguments of both the sides are almost complete. “The concluding arguments of both sides will be made on May 17,” said Prashant Chandra, advocate for the Sahara group.

On November 24, SEBI had banned several Sahara group entities from raising money from the public for allegedly violating public issue norms.

Sahara India Real Estate and Sahara Housing Investment raised at least Rs 4,843 crore by issuing optionally fully convertible debentures to investors. SEBI guidelines on public issues prescribe eligibility criteria for accessing public money, mandate due diligence of the company and its promoters by merchant bankers, grading by credit rating agencies, and vetting of the Draft Red Herring Prospectus by the regulator against disclosures norms. SEBI said none of these norms were followed in the debenture issue.

Sahara group challenged the SEBI order, saying it was not a listed entity and SEBI did not have the jurisdiction to regulate it. SEBI argued the issuing of equity or debt instruments to more than 49 investors clearly came under its purview.

In January, the decision on the case was hastened by the Supreme Court, which directed the lower court to hear the case on a day-to day basis. The SEBI order was stayed on December 13. This stay was lifted by the court on April 7, restricting the Sahara group from raising money.

On Friday, the court turned down a request by the Sahara group to recall an April 7 order, lifting a stay on the SEBI order. Meanwhile, Sahara also filed a Special Leave Petition (SLP) with the Supreme Court against the vacation of the stay. This petition is likely to come up for hearing soon.

Sahara has since then, launched investment schemes under a cooperative society to continue money raising activity.