Sahara Group: SEBI Orders Attachment of Bank, Demat Accounts of Subrata Roy, Others To Recover Rs6.42 Crore

Moneylife Digital Team 27 December 2022

Investor Interest

The Securities and Exchange Board of India (SEBI) has issued an order to attach the bank and demat accounts of Sahara group companies, its chief Subrata Roy and others to recover Rs6.42 crore for violating regulatory norms in the issuance of optionally fully convertible debentures (OFCDs). In June 2022, SEBI had imposed a penalty of Rs12 crore on five entities of the Sahara group in the same matter.

SEBI's recovery proceedings are against five entities—Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation), Subrata Roy, Ashok Roy Choudhary, Ravi Shanker Dubey and Vandana Bharrgava and the amount Rs6.42 crore, includes interest, all costs, charges and expenses.

The market regulator has asked all banks, depositories and mutual funds not to allow any debit from these identified accounts. Further, these entities have been asked by SEBI to provide details of accounts held by five entities from the Sahara group, share a copy of the account statements, and give details on loans or advances, if any. Banks, depositories and mutual funds have also been asked to confirm the attachment of the accounts held by the five entities from Sahara group.

Earlier in June this year, SEBI imposed penalties of Rs12 crore on Sahara Commodity Services Corporation (erstwhile SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) for violating regulatory norms in the issuance of OFCDs in 2008 and 2009. The matter had come to light when group firm Sahara Prime City had filed its offer document with SEBI in 2010.

The two companies had issued the OFCDs during the 2008 and 2009 period, allegedly, in contravention of the provisions of the SEBI's ICDR (Issue of Capital and Disclosure Requirements) Regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.

SEBI found that SIRECL and SHICL raised money through the public issue of securities by issuing the OFCDs without following the various procedures intended to protect the interest of the investors, in respect of public issues, prescribed under the norms.

Further, SEBI said the subscription towards the OFCDs was solicited by the two entities—SIRECL and SHICL—from the general public throughout the country without adequately informing them about the risks involved in the instruments (OFCDs), or the risks attached to the issuing companies or risks attached to the project for which the capital was being raised. (Read: Sahara OFCD Issuance: SEBI Imposes Rs12 Crore Penalty on 2 Group Companies, Subrata Roy & 3 others)

Moneylife has been covering all stories on Sahara. In case you missed them, you can read them here: https://www.moneylife.in/tags/sahara.html

Comments

User

r_ashok41

2 years ago

it is surprising sebi is taking action now.When Sahara group head was arrested and is in jail at that time itself all his accounts anywhere including ncd etc should be seized .I do not know what took them so long to act.Actually that is first thing that ED should do so that the concerned person does not manipulate the same