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The Securities and Exchange Board of India (Sebi) is probing allegations of money raising activities by the Sahara India Parivar under the guise of its retail venture, Sahara Q Shop Unique Products Range Ltd.
Sebi has told the Allahabad high court it is examining the schemes of Sahara Q Shop, under the powers and responsibilities given to it by an ordinance issued earlier this year. As has already been reported, the Supreme Court is hearing a contempt petition filed by Sebi against the group in a related matter.
The Securities Laws (Amendment ) Ordinance, repromulgated in September, amends Section 11AA of the Sebi Act, 1992. This sections dealt with collective investment schemes. According to the amendment, any scheme or arrangement where pooling of funds has a corpus of Rs 100 crore or more and is not covered under exceptions given therein shall be deemed a collective investment scheme. Given this, Sebi's affidavit to the court says, it is examining the said schemes.
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The affidavit was in response to a notice issued by the Lucknow bench of the court on a petition filed by an Indian Police Service officer, Amitabh Thakur, and his wife, Nutan Thakur.
Sebi's affidavit has said it has got complaints on alleged misrepresentation by Sahara Q Shop in the process of collecting money from the public. And, that the group was allegedly "forcibly and unilaterally converting the investments in Sahara India Real Estate and Sahara Housing Invest to Sahara Q Shop without any consent of the investor, in defiance of the orders of the Supreme Court."
Sahara India Real Estate Corp and Sahara Housing Invest Corp have been prohibited by Sebi from raising money from the public. In August last year, the SC ordered the companies to repay Rs 24,029 crore raised by these companies through issue of optionally fully convertible debentures from 29.6 million investors, with an interest of 15 per cent.
An email seeking comments, sent to the Sahara India spokesperson on October 30, did not elicit a response. Subsequent attempts to reach the communications department and the group's public relations agency did not produce results. An email seeking comments sent to the Sebi spokesperson also did not elicit a response.
Sebi has moved contempt petitions in the SC, in which the court recently directed the Sahara firms to file property title deeds to cover the remaining amount of around Rs 20,000 crore. Sebi itself had last year cautioned investors against investing money in Sahara Q Shop through public advertisements. However, the Q Shop issue has not been highlighted by either party in the contempt proceedings in the SC, on for several months now.
Recent data put out by the troubled National Spot Exchange (NSEL) showed that Sahara Q Shop had invested a little over Rs 220 crore through Indian Bullion Markets Association, a subsidiary of NSEL. In the petition filed in the Lucknow bench of the high court, the petitioner said, "The petitioners have bought one bond/advance receipt of Rs 1,000 each from a company called Sahara Q Shop Unique Products Range Ltd. The petitioners were told by the authorities of Sahara Q Shop that they would get a return of Rs 2,335 on a Rs 1,000 bond after a period of six years."
The petitioners were also provided a Scheme Chart of Sahara India Parivar, which said the redemption value/return of Rs 1,000 would be Rs 2,354 after a period of six years.
However, the 'General Terms and Conditions' of the Sahara Q Shop bonds stated things different from what was told orally and through the Scheme Chart, the petition said.
