Sebi imposes ₹12cr fine on 2 Sahara Group firms, Subrata Roy, others. Read here
1 min read 27 Jun 2022, 09:56 PM ISTThe case relates to issuance of OFCDs by Sahara India Real Estate Corporation Limited, now known as Sahara Commodity Services Corporation Limited, and Sahara Housing Investment Corporation Limited
PremiumNEW DELHI : Regulatory body for securities and commodity market in India, Securities and Exchange Board of India (Sebi) had imposed penalties of up to ₹12 crore on two Sahara Group firms.
The regulatory body has also imposed penalties on Subrata Roy Sahara and three others – Ashok Roy Choudhary, Ravi Shanker Dubey and Vandana Bharrgava for violating regulatory norms in the issuance of optionally fully convertible debentures in 2008 and 2009.
The Sahara Group firms that need to pay the penalties include Sahara Commodity Services Corporation Ltd and Sahara Housing Investment Corporation Ltd.
The fines need to be paid jointly and severally within 45 days, according to a Sebi order.
The case relates to issuance of Optionally Fully Convertible Debentures (OFCDs) by Sahara India Real Estate Corporation Limited (SIRECL), now known as Sahara Commodity Services Corporation Limited, and Sahara Housing Investment Corporation Limited (SHICL).
The two companies had issued the OFCDs during 2008 and 2009 period, and were allegedly done in contravention of the provisions of the Sebi's ICDR (Issue of Capital and Disclosure Requirements) Regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.
Sebi found that SIRECL and SHICL raised money through public issue of securities by issuing the OFCDs without following the various procedures intended to protect the interest of the investors, in respect of public issues, prescribed under the norms.
Further, Sebi said the subscription towards the OFCDs was solicited by the two entities -- SIRECL and SHICL -- from the general public throughout the country, without adequately informing them about the risks involved in the instruments (OFCDs), or the risks attached to the issuing companies or risks attached to the project for which the capital was being raised.
"Therefore, I conclude that the two companies i.e. SIRECL and SHICL and their promoter/directors have issued the OFCDs in a fraudulent manner in order to induce gullible investors to subscribe to such OFCDs, thereby violating the provisions of... the PFUTP Regulations," Sebi's Adjudicating Officer Suresh B Menon said in the order.
Also, the entities did not comply with the orders and summons issued by the regulator.
