Supreme Court Issues Notice In SEBI Appeal Against SAT Relief To Sahara Officials In ₹14,106 Crore OFCD Case
The Supreme Court on Thursday issued notice in an appeal filed by SEBI challenging a Securities Appellate Tribunal (SAT) order granting relief to certain officials of Sahara India Commercial Corporation Ltd. (SICCL) including its managers and company secretary, from liability arising out of the company's ₹14,106 crore OFCD fund-raising scheme.
A vacation bench of Chief Justice Surya Kant and Justice V. Mohana while issuing notice tagged the case with a similar pending matter, which will be heard in July.
The case arose from SEBI's directions requiring SICCL, its directors, promoter and Sahara India to refund amounts mobilised through Optionally Fully Convertible Debentures (OFCDs), disclose assets, publish public notices and face market access restrictions.
SEBI found that SICCL had mobilised approximately ₹14,106 crore from nearly 1.98 crore investors through OFCDs between 1998 and 2008. Rejecting SICCL's contention that the issuances were private placements, SAT held that the offer was effectively a public issue since it had been made to nearly two crore investors, far exceeding the statutory threshold under Section 67(3) of the Companies Act, 1956.
The Tribunal further held that SICCL had failed to obtain the requisite stock exchange approvals and comply with applicable securities laws. It also rejected the company's contention that most investors had already been repaid, finding insufficient evidence of actual refunds.
While dismissing the appeals filed by SICCL and its directors, SAT granted relief to the company's managers and company secretary, holding that they could not be held responsible for the violations committed by the company merely by virtue of their positions.