Court issues fresh summons to Sahara, its chief Subrata Roy

A magistrate today issued fresh summons to two Sahara Group firms and their top executives, including the organisation chief Subrata Roy, asking them to appear on September 30 in connection with the alleged violation of regulations of Companies Act and Sebi Act.
The court had earlier taken cognisance of the case filed by SEBI and issued summons but no report was filed regarding service of summons (by Sebi) to the respondents, following which the court issued fresh summons against them.
The order came on a day when SEBI made a forceful plea in the Supreme Court today to take contempt action against Subrata Roy along with his two firms and their directors for not complying with its order for refunding Rs 24,000 crore to investors.

The magistrate had on July 7 taken cognisance of SEBI's complaint and issued process against the two companies Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL) and their top officials under various sections of the Companies Act and the Sebi Act.
The relevant sections of the Companies Act deal with matters related to disclosures made in the prospectus or issue of shares or debentures, criminal liability for mis-statements in prospectus, penalty for fraudulently inducing persons to invest money and penalty for false statements.
Sebi had begun a probe in 2008 after it received complaints alleging that SIRECL and SHICL were issuing convertible bonds to the public throughout the country without complying with the applicable statutory requirements.

It was later found that the two companies had raised funds amounting to close to Rs 25,000 crore by allotting Optionally Fully Convertible Debentures (OFCD) to more than 3 crore investors without following various statutory and regulatory requirements stipulated under the Companies Act and the relevant Sebi regulations.