Sebi files contempt petition against Sahara group in SC over OFCD row

Market regulator Sebi on Friday filed a contempt petition against the Sahara group and its managing director Subrata Roy for non-compliance of the Supreme Court's directions, asking them to refund Rs 24,000 crore raised from investors through optionally fully convertible debentures (OFCDs).

Urging the apex court to initiate contempt and punish the Sahara firms, Subrata Roy Sahara and directors — Ashok Roy Choudhary, Ravi Shankar Dubey, Vandana Bhargava — Sebi, in its new contempt plea, accused the companies of wilful and deliberate violation and non-compliance of the August 31 order that asked the group to furnish documents within 10 days to Sebi on the OFCDs.

They (Sahra group) were duty bound to strictly comply with the directions of the apex court both in letter and spirit, Sebi said.

The apex court on August 31 had asked two Sahara group entities — Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation) and Sahara Housing Investment Corporation — to refund around R24,000 crore collected from investors under the scheme.

To expedite the whole process of refund, the apex court had also asked the Sahara firms to furnish all documents, particularly the application forms submitted by the subscribers, the approval and allotment of bonds, to SEBI within 10 days.

However, Sebi stated that while it had initiated all the steps to comply with the August 31 directions, the Sahara group firms have not only failed to comply with the directions but have also indicated their clear intention not to do so.

The market regulator said despite the directions giving clear timelines, the Sahara firms, "in utter disregard, disrespect and disobedience of the directions" of the court deliberately and wilfully did not comply with any of the directions, thus committed contempt of the court by directly settlling their liabilities with their investors.

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