Sebi and the Sahara Pariwar - a timeline
The Sahara Group has been engaged in a fierce regulatory battle with capital markets watchdog Sebi with allegations of fraud and causing a loss of more than Rs. 24,000 crore to thousands of investors. The high-profile case, which saw the arrest of the conglomerate's chief Subrata Roy on February 28, 2014, has been a long and arduous battle for the authorities and courts. A chronicle compiled by S. Sreejith
September 2009: Sahara Prime City files Draft Red Herring Prospectus (DRHP) with Sebi to bring out an initial public offer of shares to public investors.
October 2009: Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing Investment Corporation Ltd. (SHICL) file Red Herring Prospectus with Registrar of Companies.
December 2009: Sebi receives complaint from Professional Group for Investor Protection against SIRECL and SHICL alleging illegal means used by these two firms in issuance of OFCDs (optionally fully convertible debentures), to the public throughout the country for many months.
January 2010: Similar complaint received against Sahara group from one Roshan Lal through National Housing Bank. Sebi seeks clarifications from the group, initially through their investment bankers Enam Securities and later directly. Further investigations found that the funds were raised through OFCDs after filing RHPs (red herring prospectus) with the Registrar of Companies, although the rules required permission from Sebi for any issuance of securities to 50 or more investors. In these cases, the number of investors ran into crores.
November 2010: Sebi passes interim order against the two firms, asking them to refund the money collected from investors.
June 2011: Sebi passes final order and Sahara challenges these directions before the Securities Appellate Tribunal.
October 2011: Securities Appellate Tribunal upholds Sebi order and asks the companies to refund Rs. 25,781 crore to over three crore investors.
August 2012: Sahara moves Supreme Court, which also passes order asking the two companies to deposit over Rs. 24,000 crore to Sebi for refund.
December 2012: Supreme Court asks Sahara to deposit the money in three instalments beginning with an immediate payment of Rs. 5,120 crore.
February 2013: Sebi issues orders to attach bank accounts and other properties of the group after companies failed to pay remaining two instalments and later issues summons for personal appearance of Sahara chief Subrata Roy and other three directors before it.
April 2013: Subrata Roy appears before Sebi after summons.
July 2013: Sebi moves Supreme Court against Sahara group for non-compliance with the court’s direction November 2013: Subrata Roy barred from leaving the country.
February 20, 2014: Supreme Court asks Subrata Roy to appear personally.
February 26, 2014: Supreme Court issues non-bailable warrant after Subrata Roy fails to make personal appearance; Sahara chief cites mother’s illness for non-appearance.
February 28, 2014: Subrata Roy arrested in Lucknow and sent to police custody till March 4.