Mumbai: The Securities Appellate Tribunal (SAT) has asked market regulator Securities and Exchange Board of India (Sebi) to file an affidavit in two weeks explaining why it hadn’t accepted the documents furnished by two Sahara Group firms as directed by the Supreme Court.
Sahara Housing Investment Corp. Ltd’s and Sahara India Real Estate Corp. Ltd approached SAT on 12 November against Sebi’s refusal to extend the time for filing of documents by the two firms.
The two Sahara group companies, whose appeal was first heard on Monday, want Sebi to extend the deadline for submission of documents till 31 January, said Janak Dwarkadas, a senior advocate representing Sahara before SAT.
Sahara, however, said it had not formally asked Sebi for the deadline extension. Sebi is under the impression that once the court had passed an order setting a deadline, the regulator has no powers to extend it, the Sahara group counsel said.
The two-member SAT bench comprising P.K. Malhotra and S.S.N. Murthy, said it was examining Sahara’s request and adjourned the case to 20 December.
The Supreme Court order pertains to the market regulator’s action against the Sahara firms that sought to raise money selling securities known as optionally fully convertible debentures, or OFCDs. The apex court verdict requires the two Sahara firms to refund Rs.24,029.73 crore along with 15% annual interest to all OFCD investors within three months.
The companies had collected the money from at least 29.61 million investors between April 2008 and April 2011, the Supreme Court order had said.
Sebi said the Sahara Group companies were making a public issue without following the regulator’s rules for such issues.
The top court upheld Sebi’s decision asking the two companies to return the money they had raised and asked the regulator to monitor this process.
After Sahara Housing Investment and Sahara India Real Estate missed the 10 September deadline for submitting documents relating to the subscribers to the debentures, the regulator approached the Supreme Court on 2 November with a contempt petition.
In its appeal to SAT, the Sahara group said it was impossible to send details of 30 million investors in 10 days as prescribed by the Supreme Court because the documents numbered some 300 million pages. It was logistically not possible to provide the documents in 10 days, Sahara argued.
So far, the market regulator has only accepted compact discs containing information. No other document has been accepted by them, Sahara told SAT on Monday.
Sahara’s counsel said the group firms want to refund money to the investors as soon as possible.
Sebi should have accepted the documents even if Sahara was late in submitting the documents by two or three days, SAT said, adding that the duty of the regulator is to protect the interest of small investors.
Sebi’s lawyer Prateek Seksaria said that even after the Supreme Court order in the case, Sahara had made payments directly to investors. Seksaria said the appeal filed by the two Sahara firms in SAT was not maintainable, adding that Sahara should have moved the top court for extension of the deadline for submission of documents.
Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with Sebi. Mint is contesting the case.