Following its order to attach the assets of Sahara Group companies the next task of the the Securities and Exchange Board of India (SEBI) is to identify the “real investors” and what exactly is the liability of the company to them.

Further, the capital market regulator may face hurdles to attach them as the properties are spread over many States, which means the regulator needs the support of the State governments to recover these funds.

“Before appropriating the amount, the SEBI has to crystallise the liabilities,” said R. S. Loona, Managing Partner, Alliance Corporate Lawyers. “Once SEBI does this then the appropriation will be followed under the supervision of the Supreme Court,” added Mr. Loona, who was also the Executive Director, Legal of SEBI, earlier.

The market regulator initiated the action of attachment of bank accounts of promoters and their assets on February 13.

Two questions arise now: “Whether Sahara will be able to repay the money back? Whether they (investors) are benami or genuine?” says Sandeep Parekh, Founder, Finsec Law Advisors, quoting the Supreme Court.

According to him, there is an effort on the part of Sahara Group to circumvent the orders, “which hurts the faith of the public on regulations”.

However, Mr. Parekh believes that the regulator has been consistent in its stand against the Sahara Group.

“To monetise these assets, SEBI has to auction them which would not be an easy task for the regulator as many obstacles would be created by interested parties,” said Mr. Parekh, who too was an Executive Director, Legal of SEBI. Meanwhile, lot of funds of Sahara Group moved out of Sahara’s accounts as it made huge investments in hotels and other prime properties in London and New York.

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