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The Securities and Exchange Board of India (Sebi) on Tuesday cancelled the registration of Sahara Asset Management Company (AMC) within six months from the date of the order.
All the assets the company have been managing would have to be transferred to a different fund house as per the order. The regulator had observed that the promoters of Sahara AMC were not “fit and proper”.
According to the disclosures made to Sebi, the shareholding pattern (equity) of Sahara AMC includes 46 per cent stake of Sahara India Financial Corporation Limited (Sahara Sponsor).
“Pending contempt proceedings against Subrata Roy Sahara, SHICL/SIRECL (group companies of Sahara) and other litigations initiated and pending against Subrata Roy Sahara, Sahara MF along with the Sahara AMC and Sahara Sponsor are no longer fit and proper persons to carry out the business of a Mutual Fund,” stated the 22-page order passed by whole-time member Prashant Saran.
The regulator has also held the fund house guilty of not disclosing the ongoing litigations -- the case in the Supreme Court, Sebi order in 2011, which had directed Sahara to refund its investors, and also barred Subrata Roy from associating with any listed public company and any company that raises money from the public.
“Sahara AMC, in my view, has violated the provisions of Regulation 22 of the MF Regulations, which requires the AMC to inform Sebi of any material change in the information or particulars,” stated the order. Saran also noted that Subrata Roy has continuously failed to provide the required information as per the MF Regulations since June 23, 2011.
Sahara MF has been directed to transfer the activities of Sahara Sponsor and Sahara AMC to a Sebi-approved AMC within five months from the date of the order.
If the sponsors fail to transfer the business and the AUM to another AMC, Sahara would be required to redeem the units allotted to its investors and credit the respective funds to its investors, without any additional cost.
An email sent to Sahara did not elicit a response.
All the assets the company have been managing would have to be transferred to a different fund house as per the order. The regulator had observed that the promoters of Sahara AMC were not “fit and proper”.
According to the disclosures made to Sebi, the shareholding pattern (equity) of Sahara AMC includes 46 per cent stake of Sahara India Financial Corporation Limited (Sahara Sponsor).
“Pending contempt proceedings against Subrata Roy Sahara, SHICL/SIRECL (group companies of Sahara) and other litigations initiated and pending against Subrata Roy Sahara, Sahara MF along with the Sahara AMC and Sahara Sponsor are no longer fit and proper persons to carry out the business of a Mutual Fund,” stated the 22-page order passed by whole-time member Prashant Saran.
The regulator has also held the fund house guilty of not disclosing the ongoing litigations -- the case in the Supreme Court, Sebi order in 2011, which had directed Sahara to refund its investors, and also barred Subrata Roy from associating with any listed public company and any company that raises money from the public.
“Sahara AMC, in my view, has violated the provisions of Regulation 22 of the MF Regulations, which requires the AMC to inform Sebi of any material change in the information or particulars,” stated the order. Saran also noted that Subrata Roy has continuously failed to provide the required information as per the MF Regulations since June 23, 2011.
Sahara MF has been directed to transfer the activities of Sahara Sponsor and Sahara AMC to a Sebi-approved AMC within five months from the date of the order.
If the sponsors fail to transfer the business and the AUM to another AMC, Sahara would be required to redeem the units allotted to its investors and credit the respective funds to its investors, without any additional cost.
An email sent to Sahara did not elicit a response.
