The Counsel for the Sahara group of companies came in for some uncomfortable queries from the Supreme Court on Monday on its appeal against the bar on its recent schemes of raising the funds. Subrata Roy The Securities and Exchange Board of India had first banned two group entitites and their promoters from raising money. The Allahabad high court had, last month, declined to interfere with the order, also blowing the Sahara group in the process.
The Supreme Court on Monday asked Sahara India Real Estate Corporation to bring before it on Thursday the guidelines in which investors were asked to apply for debentures. The Chief Justice S H Kapadia also asked the corporation to show the list of its agents employed to make money. The court said it was not clear about the concept of the Optionally Fully Convertible Debenture through which the firm said it was raising the money. It asked Soli Sorabjee, counsel for the Sahara group, to explain it, but he was unable to. “If you don’t understand it, how can rural people understand it?” asked the court.
The Securities and Exchange Board of India had demanded full details on applicants for the scheme and said it was issuing the stop-order due to non-compliance. Sorabjee argued the company shouldn’t be held responsible if investors gave false addresses and particulars. Sahara is also protesting at Sebi’s public advertisement on the matter, telling investors to keep away, as having given it a bad name and helping its competitors. The Allahabad HC had rejected the plea regarding OFCD schemes floated by Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd.