A special court here has rejected the applications filed by Sahara Group chief Subrata Roy and three others seeking discharge from a case pertaining to sale of bonds to the public in violation of securities rules.
The special SEBI court had, while rejecting the applications earlier this month, noted that there was enough material on record to frame charges against the accused.
“Having regard to the facts of the case, documentary evidence on record, in my opinion the accused persons have not made out a prima facie case for discharge,” Judge M.M. Umar said in the order.
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Besides Mr. Roy, two group companies — Sahara Housing Investment Corporation and Sahara India Real Estate — and their three directors are named as accused in the case. Mr. Roy and the three directors had filed applications in the court seeking discharge from the case.
The case relates to the issue of optionally fully convertible debentures (OFCD) by the companies. The Sahara Housing Investment Corporation had passed resolutions under relevant provisions of the Companies Act to raise funds through the issue of unsecured OFCD by way of private placement to friends, associates, group companies, workers and any other affiliated companies of Sahara Group.
As per the allegations, the company had issued the OFCD to more than 75 lakh subscribers, which is in excess of the limit for private placement. As per the provisions of the Companies Act, private placement can only be made to not more than 50 persons.
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Therefore, OFCDs issued by the accused was a public issue in the guise of private placement.
As per the affidavit filed by the company before the Securities Appellate Tribunal, it collected ₹6,380.5 crore through the issue of OFCD from November 2009 to April 2011. The other group company had allegedly collected ₹19,400 crore from over two crore investors in a similar way between April 2008 and 2011.