Sebi relies on Sahara order to nail StockGuru fraudsters
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Two Sahara group companies were asked by the Supreme Court to refund the money collected from investors through certain convertible debentures, after the firms approached the apex court against a Sebi order in this regard.
"In the present (StockGuru) case, convertible preference shares were offered and issued to more than 49 persons" and therefore it qualifies as a public offer, he said, adding that SGI offered 'specified securities' to public but did not comply with the applicable Sebi Regulations and Companies Act.
Agarwal further noted that it is a settled position, in view of the Supreme Court order in Sahara case, that the power to administer proceedings in cases of public issue of shares or debentures lies with Sebi.
Sebi's investigations found that SGI had invited investors to subscribe to its convertible preference shares through its office in Delhi, its agents and representatives, associate concern 'stockguru.india' and its website.
Sebi said that "these securities were of face value Rs 10 each and were offered and subscribed at an exorbitant premium of Rs 1,500 per share". However, the promised dividend of 18 per cent was found to be on face value of Rs 10 and not on exact per share price of Rs 1,510.
"In other words, subscribers were promised dividend of Rs 1.80 on investment of Rs 1,510 (which translates into 0.119 per cent real dividend). Further, there was no reference of redemption premium to be paid to the subscribers," Sebi said.
"There was no economic justification of payment of so high premium with minuscule dividend..."it added.
SGI did not issue any share certificate to subscribers even on payment of money and made various "misrepresentations and false statements containing misleading and distorted information that the said convertible preference shares shall soon get listed after Sebi approval and the listing price would be around Rs 2,000 per share".
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