The Securities and Exchange Board of India (Sebi) has begun prosecution proceedings against two Sahara Group firms and their top officials, while accusing them of failing to provide documents related to 3 crore investors as per a Supreme Court order.
The prosecution proceedings have been launched against Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHCIL), as also their promoter/directors — Ashok Roy Choudhary, Ravi Shankar Dubey, Vandana Bhargava and Subrata Roy Sahara — Sebi said.
The market regulator further said “as Saharas did not submit the documents as per the order dated August 31, 2012, of the Supreme Court, Sebi has filed a contempt application before the Supreme Court”.
While the Sahara Group spokesperson did not offer any comment on the Sebi move, the companies last week approached the Securities Appellate Tribunal, seeking time till January 31, 2013, for submission of documents.
The apex court had asked SIRECL and SHCIL to refund an estimated R24,000 crore collected from about 3 crore investors, through red herring prospectuses in March 2008 and October 2009, along with 15% annual interest to Sebi by November 30, 2012.
The Sahara companies were also asked to furnish within 10 days all documents in their custody, particularly the application forms submitted by subscribers, the approval and allotment of bids and all other documents to Sebi so as to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited.
The Supreme Court had also asked Sebi to identify the subscribers who had invested the money on the basis of the two RHPs and refund the amount to them with interest on their production of relevant documents providing payments and after counter-checking the records produced by Sahara firms.
Sebi further said in a public notice that it has been receiving "complaints from investors that they are being forced by Saharas/their agents/officials to switch-over their investments to other schemes in Sahara Group Companies like Sahara Q Shop Unique Products Range , Sahara Credit Cooporative Society, etc. “Some investors have also complained that their investments have been switched over to the said schemes of Sahara Group Companies without their consent,” Sebi said.