SEBI’s proceedings. Meanwhile, even as the Ministry of Corporate Affairs gave an affidavit in the high court supporting Sahara’s stand, the arguments against this contiunued within the ministry.
In February 2011, the ministry sought legal opinion. Then additional solicitor general Parag Tripathi said the matter fell in the domain of SEBI. However, the ministry sought a second opinion, from another ASG, present Solicitor General Mohan Parasaran, who favoured the ministry’s stand.
A note put up internally within the ministry in April 2011 said, “The first proviso to Section 67(3) inserted by the Companies (Amendment) Act 2000 with effect from 13.12.2000 sets at rest the question by stating that if an invitation to subscription is made to 50 or more persons, it ceases to be a private placement.”
Arguing against Datar in SAT, the government lawyer, meanwhile, said he hadn’t read Parag Tripathi’s opinion as it was not in the records provided to him. By the time the ministry decided in June 2011 that it wouldn’t interfere in the case, SEBI had won in SAT. In October 2011, SAT directed the two Sahara firms to refund Rs 24,029 crore within six weeks to over 29 million investors.
THE 5,984 KALAWATIS
While maintaining a stay on proceedings against Sahara, the Allahabad High Court as well as then chief justice of India S H Kapadia had asked the group to provide the information sought by SEBI.
In April 2011, Sahara deposited an encrypted CD containing details of the subscribers of the OFCDs, without providing the password. Angered, the high court vacated the stay, saying that for it, Sahara had to “thank their own stars”.
The investigation now picked up pace, with SEBI directing Sahara to refund investors with 15 per cent interest and forwarding a copy of the order to various investigating agencies.
SEBI and the ED also told the apex court that the three crore investors listed by Sahara were not genuine. SEBI, for example, said it had found 1,433 entries in the name of Aniruddh Singh from one address.
An Indian Express report of May 2, 2013, noted that the Sahara list of OFCD subscribers had the name Kalawati 5,984 times, apart from multiple entries with the same addresses, or from places that didn’t exist.
In 2012, the Registrar of Companies opened a complaint registry for Sahara investors in Kanpur. According to Ministry of Corporate Affairs officials, only 47 complaints have been registered so far. “It is