Sat, 25 Jun 2011 13:11:36 GMT

Sahara alleges media trial by Sebi

Mumbai: The Sahara group on Friday criticised the Securities and Exchange Board of India (Sebi) for making an order against two group companies public and accused the regulator of resorting to “a media-trial in a sub judice case”. A Sebi official declined comment.

The outburst followed a Monday order by Sebi against Sahara Commodity Services Corp and Sahara Housing Invest Corp. In the biggest refund order in its two-decade history, Sebi directed the two companies to return at least Rs 4,843 crore collected under their debenture schemes to investors.

Sebi had also said the order would take effect only after it was considered by the Supreme Court. On May 12, the SC had asked Sebi to "expeditiously hear and decide this case".

Sahara Commodity (earlier known as Sahara India Real Estate Corp) and Sahara Housing started raising money by issuing optionally fully convertible debentures (OFCDs) in March 2008 and September 2009, respectively. According to the balance sheet of the former, it had raised Rs 4,843 crore in June 2009.

"The matter is sub judice and it is not appropriate for Sebi to go public by putting its order dated 23/06/2011 on its website and issuing a press note, in spite of the orders of the Supreme Court that the order of Sebi will not be given effect to," Sahara group spokesperson Abhijit Sarkar said in a statement. "It was expected of Sebi to simply place the order before the Supreme Court and maintain the sanctity of the (SC) order."

Adding: "Sebi has been vindictive and malicious towards the Sahara Group and this has been apparent from the chain of events since the last one and a half years. Such an act is really not expected from such a responsible regulator institution. Of course it is not Sebi, it is by some wrong people of Sebi."

The group said that as a responsible regulator, Sebi was meant for protecting the interest of the investors but in its case, it is "continuously scaring" investors. The group said investors' interests were safe. Over 6.6 million people had invested in the bonds, according to it.

"Investors' interest is absolutely protected by Sahara. Further, the matter is still sub judice and there is no direction/order of the courts against Sahara," the statement said.

It added Sahara faced "oppressive, restrictive, unfair and unreasonable actions" from other government authorities, too. "We wonder why? In the last 32 years of operation, not one act can be said/proved by any authority that Sahara has acted even once against the law or spirit of the law of the land."

In 2008, the Reserve Bank of India had asked Sahara India Financial Corp, a residual non-banking company which had collected deposits from the public, to wind up its business. RBI has asked the Sahara company to bring its liability to zero by 2015.

Sarkar appealed to the government, saying "it is definitely the prime duty of the government to go deep into our matter and do justice to us". He claimed the group provided livelihood to a million families.

Source: Business Standard

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