Sebi orders banks to freeze two Sahara firms’ accounts

Accounts of promoters and directors of the two firms to be also frozen

 

Subrata Roy of Sahara group. The two Sahara group firms had raised Rs24,029.73 crore from investors by selling OFCDs between 2008 and 2011. The regulator had argued that the OFCD sale was in violation of public-issue norms under the companies law and the Sebi Act. Photo: Hindustan Times  

Mumbai: The Securities and Exchange Board of India (Sebi) ordered a freeze on all bank accounts of Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL), their promoters and directors following the Supreme Court’s criticism last week of the delay in action by the regulator.

Sebi also attached several properties, development rights in projects and equity stakes in other group firms owned by SIRECL and SHICL, according to orders issued late on Wednesday.

A Sahara spokesperson said Sebi’s order for attachment of assets is based on “old facts and details of assets as of January 2012. Since then, facts have changed in view of redemptions made by Sahara from time to time. This fact of redemption was known to Sebi. Hence, today’s order does not take into account the changed facts and circumstances”.

The Supreme Court on 6 February questioned Sebi’s inaction against the two Sahara firms despite having the power to freeze bank accounts and seize properties in pursuit of refunds of the money raised by the firms through the issuance of securities called optionally fully convertible debentures (OFCDs) to 29.6 million investors.  

Sebi said in the order pertaining to SIRECL that it had failed to comply with the Supreme Court’s directions

“Consequently, Sebi is constrained to take necessary action by passing this order...for attachment and sale of properties and freezing of bank accounts, etc.,” it said.

Sebi said SIRECL had issued OFCDs worth around Rs.19,400 crore as of 13 April 2011, while SHICL raised Rs.6,380 crore through the hybrid bonds. According to a 5 December order by the apex court, SIRECL was to pay a sum of Rs.5,120 crore immediately, then Rs.10,000 crore in the first week of January and deposit the remaining amount with 15% annual interest in the first week of February.

Sahara’s said Rs.5,120 crore has already been deposited with Sebi. Regarding the instalments to be deposited with the regulator, Sahara said it has filed an interim application before the Supreme Court asking the company be “permitted to furnish security through a credible financial institution instead...as it has already redeemed significant number of OFCD holders and any further payments to Sebi would amount to double payment”.

Sebi ordered attachment of SIRECL’s development rights worth Rs.3,459 crore in land owned by Aamby Valley Ltd, similar rights worth Rs.1,436 crore in Delhi, a stake worth Rs.1,848 crore in a project in Versova, Mumbai, a 90-95% stake worth Rs.1,105 crore in 64 special purpose vehicles of the Sahara group, and a stake worth Rs.5,207 crore in Aamby Valley among others. The company also has to recover investments worth Rs.125 crore in partnership firms and deposit with Sebi another Rs.1,655 crore that it held in cash and bank balances as of 30 November 2011, said the order.

TOUHID HUSSAIN
PGDM 2nd SEM