An analysis of Sahara India Real Estate Corp Ltd and Ors. V. SEBI


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The Supreme Court while confirming 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.

These two Sahara Group companies have 90 days to deposit the money with SEBI, which would have to return the money to investors, the Supreme Court had ruled.

Sahara India Real Estate Corp Ltd and Ors. V. SEBI:

SIRECL and SHIC, are  the companies controlled by the Saharas group. The two appellants  companies have raised about 19000 crores rupees from investors by  issuance of Optionally Fully Convertible Debentures by passing  Special resolution U/S 81(1A). Subsequently they filed Red Herring Prospectus to the  concerned ROC and specifically mentioned therein that the company did  not intend to list the shares on any stock exchanges. It is indicated  that the intention of the company was to carry out infrastructural  activities and the amount collected from the issue would be utilized in  financing the completion of projects, namely, establishing/constructing  the bridges, modernizing or setting up of airports, rail system or any  other projects which might be allotted  to the company from time to  time.

One of the group company Sahara Prime City Limited intends to raise  funds through listing of its shares filed Prospectus to SEBI. While  processing the prospectus, SEBI received complaint from one Roshan Lal  alleging that Sahara group was issuing Housing Bonds without complying  with Rule/Regulation by RBI/MCA/NHB. SEBI also received  complaint from “Professional Group of Investors Protections” which prompted SEBI to ascertain the correct  factual position.