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SC dismisses Sahara plea on OFCD refunds

SC dismisses review of the August 2012 order directing two Sahara firms to refund investors who had subscribed to their OFCDs
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First Published: Thu, Jan 10 2013. 12 09 AM IST
The latest Supreme Court order will require the two Sahara group firms to refund the money with 15% annual interest to all OFCD investors by February. Photo: Mint
The latest Supreme Court order will require the two Sahara group firms to refund the money with 15% annual interest to all OFCD investors by February. Photo: Mint
Mumbai/New Delhi: India’s apex court on Wednesday dismissed a petition filed by two Sahara group firms—Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL)—seeking to review the court’s August 2012 order directing these companies to refund Rs.24,029.73 crore along with annual interest of 15% to investors who had subscribed to their optionally fully convertible debentures (OFCDs) within three months.
The Supreme Court (SC) order said the contentions raised by the two Sahara group firms have been “examined, addressed and answered on all possible angles and dimensions”, and there is no ground to review the earlier order.
“We also do not find any inconsistency in the views expressed by both of us,” said the order passed by justices K.S. Radhakrishnan and Jagdish Singh Khehar, referring to the August order.
The apex court also dismissed Sahara’s plea seeking permission for open court listing, intervention and directions/stay on the SC order.
The company offered no comment for this story.
Calls and a text message sent to the mobile phone of senior advocate Ram Jethmalani, who appeared for Sahara, did not elicit a response.
In October, Sahara group had filed a petition in the apex court seeking a review of its August order that directed the two firms to refund Rs.24,029.73 crore to investors.
The August order had reaffirmed an order of market regulator Securities and Exchange Board of India (Sebi), which had banned the two unlisted firms from raising money from small investors through the sale of OFCDs.
SIRECL and SHICL had collected the money from at least 29.61 million investors between April 2008 and April 2011, the SC order had said.
The capital market regulator had said that the OFCD sale was in violation of public issue norms under the companies law and the Sebi Act.
Even as its deadline for the repayment of money to investors expired in November, the two Sahara group firms moved the apex court seeking more time to pay back the money. On 6 December, an SC bench, headed by Chief Justice Altamas Kabir, ordered the two companies to initially deposit Rs.5,120 crore with the regulator and pay the rest in two instalments in January and February.
The latest SC order will require SIRECL and SHICL to refund the money with 15% annual interest to all OFCD investors by February.
While Sebi is expecting the first of the two instalments this month, on 2 January, the two Sahara firms moved the apex court seeking a stay on the payment of the two instalments. The group claims the total outstanding liability of the companies is Rs.2,620 crore and this amount had already been deposited with Sebi on 5 December. The apex court on 7 January gave SIRECL and SHICL 15 days to submit all documents related to the outstanding liabilities of the firms towards OFCD investors to Sebi and warned that any failure to follow the order would lead to attachment of assets of the companies.
Sahara India Pariwar had issued an advertisement in leading newspapers in December claiming its total outstanding liability was Rs.2,620 crore. The advertisement said the group has, over a period of time, “redeemed the OFCDs issued to the investors and presently the total outstanding liabilities of both the companies is Rs.2,620 crore only”.
khushboo.n@livemint.com
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.
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First Published: Thu, Jan 10 2013. 12 09 AM IST
More Topics: Sahara Group | Supreme Court | Sebi | OFCDs |