Sahara vs Sebi Case
LEGAL ASPECTS OF MANAGEMENT ASSIGNMENT
SAHARA INDIA REAL ESTATE CORPORATION LIMITED AND OTHERS VS SECURITIES AND EXCHANGE BOARD INDIA AND ANOTHER
Presented by: Ateendra Mishra Section a Roll No.:48
1
INTRODUCTION ABOUT THE CASE
On, 31st Aug, 2012, Supreme Court of India passed a landmark judgment wherein, the honorable court ordered business conglomerate and leading sports sponsor Sahara to refund more than $3 billion it collected from millions of small savers. It all started when in 2008 the two companies of the group Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) started raising funds through Red Herring Prospectus (RHPs), and had collected Rs 17, 400 till March 13, 2008, & Over Rs 7, 000 till October 16, 2009 In the meanwhile, SEBI i.e. Securities and Exchange Board of India, in Nov 2010, had restrained the above two companies from raising funds in the form of Optionally Fully Convertible Debentures (OFCD), against which in Dec 2010, Sahara got SEBI order stayed in Allahabad High Court. In Jan 2011, SEBI issued advertisements cautioning investors, in Apr 2011 Allahabad asked Sahara to go to the apex court. In May 2011, SC asks SEBI to continue its OFCD probe.
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In Jun 2011, SEBI asked the above mentioned two companies to refund back the money to the investors, in response to which Sahara in Jul 2011, appeals in Supreme Court stating that SEBI has no jurisdiction in the case. Supreme Court orders Sahara to approach the Securities Appellate Tribunal (SAT), in Oct 2011, SAT upholds the SEBI order. In Nov 2011, Sahara Challenges the SAT order obtains stay. But finally on 31st Aug, 2012 Honorable Supreme Court delivers the verdict against Sahara and asks the above mentioned two companies to pay the collected amount i.e. Rs 24, 400 Crore + 15% Interest to its 2.21 Crore investors.
3
VIEW POINT OF THE PARTIES
Securities and Exchange Board of India (SEBI)
SEBI was of the view that The OFCDs
SAHARA INDIA REAL ESTATE CORPORATION LIMITED AND OTHERS VS SECURITIES AND EXCHANGE BOARD INDIA AND ANOTHER
Presented by: Ateendra Mishra Section a Roll No.:48
1
INTRODUCTION ABOUT THE CASE
On, 31st Aug, 2012, Supreme Court of India passed a landmark judgment wherein, the honorable court ordered business conglomerate and leading sports sponsor Sahara to refund more than $3 billion it collected from millions of small savers. It all started when in 2008 the two companies of the group Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) started raising funds through Red Herring Prospectus (RHPs), and had collected Rs 17, 400 till March 13, 2008, & Over Rs 7, 000 till October 16, 2009 In the meanwhile, SEBI i.e. Securities and Exchange Board of India, in Nov 2010, had restrained the above two companies from raising funds in the form of Optionally Fully Convertible Debentures (OFCD), against which in Dec 2010, Sahara got SEBI order stayed in Allahabad High Court. In Jan 2011, SEBI issued advertisements cautioning investors, in Apr 2011 Allahabad asked Sahara to go to the apex court. In May 2011, SC asks SEBI to continue its OFCD probe.
2
In Jun 2011, SEBI asked the above mentioned two companies to refund back the money to the investors, in response to which Sahara in Jul 2011, appeals in Supreme Court stating that SEBI has no jurisdiction in the case. Supreme Court orders Sahara to approach the Securities Appellate Tribunal (SAT), in Oct 2011, SAT upholds the SEBI order. In Nov 2011, Sahara Challenges the SAT order obtains stay. But finally on 31st Aug, 2012 Honorable Supreme Court delivers the verdict against Sahara and asks the above mentioned two companies to pay the collected amount i.e. Rs 24, 400 Crore + 15% Interest to its 2.21 Crore investors.
3
VIEW POINT OF THE PARTIES
Securities and Exchange Board of India (SEBI)
SEBI was of the view that The OFCDs