Crores of investors who bought optionally fully convertible debentures (OFCD) of Sahara India Commercial Corporation Ltd (SICCL) may breathe a sigh of relief as the Securities and Exchange Board of India (SEBI) has directed Subrata Roy, the company and its former directors to refund over Rs 14,000 crore that was raised without complying with the regulatory norms.
The markets regulator has ordered the company to refund the money to the investors with an annual interest of 15%. It may be noted that Sahara India Commerical had made an OFCDs offer during the financial years 1998-2009, raising about Rs 14,106 crore from a total of 1,98,39,939 investors.
In a 54-page order passed Wednesday, SEBI’s Whole Time Member Madhabi Puri Buch said, “I am of the view that SICCL engaged in fund mobilising activity from the public, through the offer of OFCDs and has contravened the provisions of …the Companies Act.”
SEBI has now barred the company from the capital markets for a period of four years. The formers directors who have been directed by SEBI to refund money include Subrata Roy, J B Roy, O P Shrivastava, Ranoj Das Gupta, A S Rao, as well as legal representatives of late D S Thapa, late P S Mishra and late Y N Saxena, they also cant access the securities markets for four years.
Apart from this, the company has also been asked to disclose the full inventory of all the properties and assets as well as details of the bank accounts, along with demat accounts and holdings in shares mutual funds and securities, if held by the company in digital form or physical form.
Subrata Roy and the company can sell assets for the sole purpose of returning the money to investors and deposit the same in SEBI Sahara refund account, which would be used to make repayment to investors, it added. SEBI has given a deadline of three months to repay.
Earlier in 2011 too, SEBI had asked two other Sahara group companies namely Sahara Housing Investment Corporation Ltd (SHICL) and Sahara India Real Estate Corporation Ltd (SIRECL) to return money that these two companies had raised via same route.
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