Apex court notice to SEBI on Sahara companies’ plea

New Delhi : The Supreme Court Monday issued notice to the securities and exchange regulator and the central government on a plea of two Sahara group companies which challenged a Securities Appellate Tribunal (SAT) award directing them to refund Rs.17,400 crore collected from investors.

The court also questioned the companies and said: “Show us your total net worth. How they have applied Rs.19,000 crore. Let them show the application of funds.”

An apex court bench of Chief Justice S.H. Kapadia, Justice A.K. Patnaik and Justice Swatanter Kumar extended till Jan 9 the date for the two companies — Sahara India Real Estate Corp and Sahara Housing Investment Corp — to refund the money collected through optional fully convertible debentures.

The apex court asked the two companies to file affidavits stating the net worth of the companies, particularly the details of the assets and liabilities.

The court was told that the Sahara companies had mopped up Rs.19,400 crore from 2.3 crore investors.

The SAT, by its Oct 18 order, directed the companies to refund the money within six weeks — a deadline which expired Monday.

On the two companies’ appeal, the apex court issued notice to the Securities and Exchange Board of India.

The SAT directed the Sahara companies to refund Rs.19,400 crore with 15 percent interest. The apex court was told that of the Rs.19,400 crore, the companies had already invested Rs.2,000 crore.

The court asked the Sahara Group companies to file their balance sheets for the year 2010-11 and the statement of accounts till Nov 30.

The judges asked the petitioner companies to state how they had deployed the investors’ money.

“It is an unsecured money. But we want to know how investors are protected,” the court said, adding “please show us from your returns how you have used this money”.

The court said if a company with Rs.10 lakh assets raised Rs.19,000 crore “it would be a total disaster”.

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