SEBI Moves SC Against SAT Relief To Sahara Managers In ₹14,106 Crore OFCD Case

The Securities and Exchange Board of India (SEBI) has moved the Supreme Court challenging a Securities Appellate Tribunal (SAT) order that granted relief to four managers and the company secretary of Sahara India Commercial Corporation Ltd (SICCL).

The tribunal had set aside, insofar as they were concerned, a 2018 SEBI order in the Rs 14,106 crore Optionally Fully Convertible Debentures (OFCDs) case involving nearly 1.98 crore investors.

The challenge comes after the SAT on March 9, 2026, upheld SEBI's findings against SICCL, Sahara India, and the company's directors. However, it set aside the liability imposed on the managers and company secretary.

A bench of Chief Justice Surya Kant and Justice V. Mohana will likely hear SEBI's challenge on June 18.

The proceedings arose from SEBI's directions requiring SICCL, its directors, promoter, and Sahara India to refund amounts mobilised through OFCDs. The directions also required them to disclose assets and inventory, publish public notices, and face market access restrictions.

SEBI's action followed an investigation into the fund-raising activities of Sahara group entities. The regulator found that SICCL had mobilised approximately Rs 14,106 crore from nearly 1.98 crore investors through OFCDs between July 1998 and June 2008.

SICCL maintained that the OFCDs were issued through private placements to a select group of investors and therefore did not attract the regulatory requirements applicable to public issues. SEBI disputed that claim, arguing that the company had failed to show that the offers were confined to specifically identified persons and that the fund-raising exercise was, in substance, a public issue.

SAT was not persuaded by SICCL's argument. It noted that the company had issued OFCDs to nearly 2 crore investors, taking the offer well beyond the 50-person threshold set out in Section 67(3) of the Companies Act, 1956.

The tribunal also found that SICCL had neither obtained permission from a recognised stock exchange before launching the issue nor secured registration under Section 12(1-B) of the SEBI Act.

In those circumstances, it held that SEBI had the authority to regulate the company's fund-raising activities and upheld the regulator's findings that the OFCD issuances breached the Companies Act and securities laws.

SAT also rejected SICCL's contention that the proceedings suffered from undue delay. It noted that SEBI came across SICCL's fund-raising activities while investigating other Sahara group companies and that the regulator issued a show-cause notice after receiving a report from the Ministry of Corporate Affairs pointing out alleged violations.

The tribunal further rejected SICCL's claim that most of the money raised had already been repaid or converted into equity. It held that the company had failed to produce adequate records proving actual repayment to investors and that a chartered accountant's certificate alone could not establish refunds to 1.98 crore persons.

While dismissing the appeals filed by SICCL and its directors, SAT granted relief to the managers and company secretary. The tribunal noted that the Whole Time Member had already exonerated them from liability as officers in default under Section 73 of the Companies Act but had nevertheless imposed liability on them under Section 62 relating to misstatements in a prospectus.

Setting aside that finding, SAT held that the managers were merely paid employees and could not be held liable for the acts and omissions of the company and its directors. It also noted that the prospectus had been signed by the company secretary pursuant to powers of attorney granted by the directors, who remained responsible as principals for the acts of their agent.

SEBI has now challenged that part of the ruling before the Supreme Court.