SEBI has discovered that Sahara group’s two companies – Sahara Commodity Services Corporation and Sahara Housing Investment Corporation, were involved in raising notable amounts of money from investors through Optionally Fully Convertible Debentures. However this is a combination of debt and equity norm which is not obeying the government public offering rules.
SEBI said that there is some discrepancy in the number of investors and subscribes and the money raising scheme. While Sahara Commodity Services Corporation claimed that it has 6.6 million investors who subscribed to securities issued by the company, but the actual figure of any firm with the largest investor base in India has less than 4 million investors. Sahara companies raised a few thousand crores through such offerings and the market regulator said the schemes could blow up in the face of millions of unsuspecting investors.
However the Sahara Group argues that it did not fall under the jurisdiction of SEBI as these were private placements and not public offerings.
The Sahara group on last Friday outburst on SEBI and criticised them for making an order against two group companies public. Spokesperson for Sahara Group also accused the regulator of resorting to “a media-trial in a sub judice case”. SEBI officials refused to comment.
Earlier this year Supreme Court had asked SEBI to pass an order on the issue and if SEBI’s this notification implemented and upheld by the Supreme Court then Sahara Group will have to refund a few thousand crores, extraordinary practice in many ways.
