SEBI orders Sahara firms to refund OFCD investors

The market regulator, Securties and Exchange Board of India, has ordered the companies part of the Sahara group, to refund the money to the optionally fully convertible debentures (OFCDs) subscribers in cash and also pay an annual interest of 15% covering the period they have held the amount.

Meanwhile, the regulator has also barred two companies -- Sahara Commodity Services Corp. (earlier known as Sahara India Real Estate Corp. Ltd or SIRECL) and Sahara Housing Investment Corp. -- along with its promoter Subrata Roy and the directors of two firms from accessing the capital markets till they return the amount.

The order from Sebi will come into effect after the Supreme Court gives it a formal clearance.

In November 2010, Sebi barred the two companies -- Sahara Commodity Services Corp and Sahara Housing Investment Corp. -- from raising public money in any manner. It said that the companies had violated the capital raising norms.

On Thursday, the Sebi ordered the two entities to refund the money to the OFCD subscribers in cash and until then the two companies cannot access capital market unless the repayments are made.

Sebi also restrained Roy and the directors of the two companies — Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary — from associating with any listed public company or any public company which intends to raise money from the public till all repayments are made.

The order also instructs the two companies to file a certificate of completion after all repayments are done with Sebi, the certificate should be issued by any two independent chartered accountants.

It, Sebi, also said in the order that provided the companies fail to do so, Sebi will take “appropriate action, including launching of prosecution proceedings...in accordance with the law".

OneIndia Money