The Securities Appellate Tribunal today asked two Sahara group firms to file an affidavit, detailing their money raising activity. The tribunal said it wanted to know the total amount of money raised, the process and the details of investors in the issues of optionally fully-convertible debentures (OFCDs) done by the two companies — Sahara India Real Estate Corp and Sahara Housing Investment Corp.
The two have appealed against an order by the Securities and Exchange Board of India, directing them to repay the money raised by issuing OFCDs. The companies have to give the details in two days. This is the third time that the group has been asked to file such details.
Last year, the registrar of companies, Kanpur, had asked for details of the number of investors and the amount raised. Sahara had said the issue was still open and they would file these details once closure was achieved.
Earlier this year, Sahara India Real Estate had told the Allahabad high court that it had over 6.5 million investors. It had also submitted a CD containing their names and addresses. However, the court had found these details incomplete and passed an order against the company. The latest direction by SAT comes at a time when the case has entered a crucial phase.
Sahara argued the OFCDs have been issued only to its associates, under the preferential allotment rules applicable for unlisted companies. Sebi contends it is a public issue under section 67(3) of Companies Act, since the number of investors exceed 50.
Counsels for both companies, Fali S Nariman and Sudipto Sarkar, completed their arguments on the merits of their appeals today. Arvind P Datar, Sebi counsel, began his response. He is expected to continue his arguments tomorrow.