Securities appellate court rejects appeal against Sahara Sebi

The Supreme Court had asked these companies to provide documents relating to these investors to Sebi within 10 days. AFP

Passing the order on the appeal filed on 27 November, SAT noted that "a contempt petition by the respondent Board (Securities and Exchange Board of India) and an assessment petition by applicants (Sahara group of companies) against the order dated 31 August 2012 are already in treatment for Supreme Court."

The apex court had asked Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara housing investment Corporation Ltd (SHICL) to an estimated Rs 24,000 crore with an annual interest rate of 15 percent, while Sebi was aimed at facilitating the refund of this money to three refund crore bondholders of the two companies.

The Supreme Court had asked these companies to deliver the documents relating to these investors to Sebi within 10 days and refund the money within three months, failing which the regulator was asked to freeze the accounts and properties of the two companies.

SEBI issued a letter to the two companies asking them to provide data on 1 November 2012 of all bank accounts and properties, if they "don't deliver the documents to the Board within the prescribed time and thus the direction of the Supreme Court violated".

In the appeal at SAT, the Sahara companies said that Sebi "has deliberately refused the documents/information and wrongly went on the basis that the appellants in the non-observance of the instructions in the aforementioned ruling of the Supreme Court".

The two companies pleaded for SAT that they also a petition before the Supreme Court seeking reconsideration of 31 August. They further said the enterprises "are observing that the Board of Directors may not dwell on the payments that can be entered in accordance with the orders of Supreme Court as the Governing Council has randomly denied the documents/information relating to the investors of any fully convertible bonds (OFCD) by the appellants.

"It is, therefore, prayed that this Tribunal the court clerk, sat directly to accept custody can the amount payable by the appellants to the respondent by 30 November is the total amount redeemed by the appellants to excellent and OFCDs together with the interest on it per the directions of the Supreme Court."

The appeal said that Sebi is redirected to the timeframe within which the defendant the amount to the holders of OFCD and repay a scheme will on how the regulator proposes to give the money back.

SEBI counsel, however, objected to the appeal and the Tribunal to hear that the letter issued by the regulatory authority to the two companies not "a judicial order" under Sebi Act was. He submitted further that the appeal is premature, as no amount has contributed by the two companies in accordance with the instructions of the Supreme Court.

PTI

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