SC asks Sahara to provide details of its fund-raising scheme

The Supreme Court was hearing Sahara Group's petition against the orders of the Allahabad High Court, which directed the company to share with market regulator Sebi the details of investors participating in the scheme.

A three-judge bench, headed by Chief Justice S H Kapadia, also told Sahara India Real Estate that it will have to explain the concept of the Optionally Fully Convertible Debentures (OFCD) scheme.

"The petitioners (Sahara) are directed to furnish to us the proforma in which the investors have applied for OFCD. They will also give us a list of accredited agents from whom these units have been bought," said the bench.

The direction follows Sahara's submission that it was the duty of Securities and Exchange Board of India (Sebi) verify the addresses of the investors in the OFCD scheme.
Two entities of Sahara Group -- Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd -- were raising money from investors through OFCDs.

Senior advocate Soli Sorabjee, appearing for the Sahara group, submitted there were around 67 lakhs investors and lots of address were not there in the forms.

To that, the bench said, "Show us those applications, at least some of them. We are asking for the format... Whether these forms were prescribed by the Sebi or not."
However, Sebi informed the bench that Sahara's plea has said, "investors should not be contacted by the Sebi."

Sorabjee said Sahara has already given two CDs, along with passwords, providing details of the investors. He also raised issue whether Sebi has jurisdiction over OFCD schemes.

Senior advocates Altaf Ahmed and P Venugopal, representing Sebi, said that the information provided by Sahara was not sufficient.

On May 2, the apex court had adjourned the matter for a week after the group's investment arm, Sahara India Real Estate Corporation, sought time to file documents.
The High Court had dismissed Sahara's plea to vacate its earlier order, which allowed Sebi to collect information on two of its OFCD schemes.

On April 29, the court said the group had not complied with its order to provide the required information for Sebi.