Countering the allegations made by SEBI Chairman
on the OFCDs raised by it, Sahara said in a public notice that the statement
made by Mr. Sinha is irresponsible and incorrect. It further said,
“Since beginning SEBI's actions have been taken with the agenda to
cause harm to Sahara through Media Trial."
Sahara recalled that when it promoted OFCDs for
the first time in 2001, it had obtained a written permission for its OFCD issue
from the Registrar of Companies (RoC) Kolkata under the Ministry of Corporate
Affairs way back in 2001 and under Sec 60B (9) of the Companies Act, submitted
prospectus to the same Registrar (filing the return) with the details of around
1.87 crore investors with their names, addresses and amounts raised etc.
Sahara is being accused of violating the rules
pubic issue rules on the pretext that the raising of funds from more than 50
investors does not remain a private placement. But the fact is that even after
informing of 1.87 crore investors in 2007, neither RoC nor any of the
government departments raised any objection. On the contrary, in 2008, Sahara
got permission from two RoCs – Kanpur and Mumbai - for raising funds through
OFCD again. Moreover, all through these 10 years, various RoCs regularly did
inspections, investigation and regularly took Balance Sheets and returns and
other documents as per Companies Act. RoCs permitted Sahara and to that extent
they were the concerned regulators for the OFCD, Sahara argued.
Recalling the SEBI’s wavering stand, Sahara said
the regulator had forwarded a complaint against the Sahara companies - Sahara
India Real Estate Corporation Limited and Sahara Housing Investment Corporation
Limited - received in April 2010 to two different Regional Directors of
Corporate Affairs Ministry, for appropriate action.
SEBI had even said in its letter to the two
Regional Directors, who were concerned with the ROCs which permitted the OFCDs,
that the issue did not fall under the market regulator’s purview since the
companies were unlisted. (Copy of the letter - http://sahara.in/furtherprecedents/docs/1.pdf)
Subsequently, Sahara pointed out, the Minister
of State for Finance had informed the Lok Sabha in April 2010 itself on a question
relating to CitiCorp’s OFCD issue that in the matters of unlisted companies
issuing securities to several thousands of persons, SEBI does not exercise any
jurisdiction. This statement was based on what the Executive Director, SEBI
informed the Finance Ministry. (Copy of the Question & Answer at
Parliament - http://sahara.in/furtherprecedents/docs/2.pdf)
In November same year, however, SEBI took a
complete U turn and submitted through an affidavit in Lucknow Bench of
Allahabad High Court that SEBI is the regulator for Sahara OFCDs, Sahara said.
Sahara pointed out in its public statement that
SEBI should be severely punished for lying in Parliament or in its affidavit in
the High Court. Any other citizen would have been jailed for such an act,
Sahara said.
Mr. Mohan Parasaran ji, the then Additional
Solicitor General of India (now the Solicitor General) had also expressed his
opinion on the query raised by the Ministry of Corporate Affairs that Sahara
was right and SEBI wrong. He mentioned in his letter, “SEBI has no jurisdiction
over the unlisted companies like the Sahara Group of Companies which are not
intending to get themselves listed.” (Opinion of Mr. Mohan
Prasanan - http://sahara.in/furtherprecedents/docs/8.pdf)
Dr. Ashok Nigam, Additional Solicitor General of
India, appearing on behalf of the Ministry of Corporate Affairs, also submitted
through Affidavit in the Court that Sahara was right and SEBI was wrong. He
also added, “In issuance of OFCD the petitioner company after their
registration with the Registrar of Companies has been permissible under the
law. The Central Government remains the regulating authority for the company.
It has got its own control system in place which has been under constant review
with the developments taking place in the corporate world and it has already
increased its controlling aspect of such companies and would further strengthen
the same by making keener and deeper scrutiny of private placement of companies”.
(Copy of the Affidavit - http://sahara.in/furtherprecedents/docs/13.pdf
)
In addition, as many as five other legal
luminaries, including two former Chief Justices of India and one ex-Chairman of
Securities Appellate Tribunal (SAT), expressed the opinion in favour of Sahara.
The Law Ministry with the signature of the then
Minister Mr Veerappa Moily, officially communicated to the Ministry of
Corporate Affairs (MCA) that Sahara was right and SEBI was wrong. MCA had, in
fact, asked for the Law Ministry’s opinion, but they never produced it
anywhere. But, somehow, Sahara got the copy and produced it in the court. SEBI
has not yet reacted to it in the Court. (Copy of the document -
http://sahara.in/furtherprecedents/docs/14.pdf
)
Contrary to its view on Sahara, SEBI took an
altogether different stand in the Kalpana Bhandari Case before the Bombay High
Court that it did not has jurisdiction over unlisted public companies that did
not intend to list their shares.
Similarly, in another case ‘Society for
Consumers and Investors Protection Vs. Union of India’ in Delhi High Court in,
SEBI took a view that it did not command jurisdiction, under Section 55A of the
Companies Act, 1956, over unlisted public companies which did not intend to get
listed.
Further, in response to the Prayag Infotech
Hi-Rise Ltd., letter dated 27th January, 2009, SEBI took a
similar stand that unlisted companies did not come under its regulatory
purview.
Stating that the company is being singled out
for imposing a severe punishment, that too with a retrospective affect, Sahara
asked as to why all the government departments are not being penalized. Had
they not given repeated permissions Sahara would not have faced such a huge
problem and injustice, the statement said and asked: “Is Sahara alone supposed to be solely responsible for the sanctity of
law and legal system of the country that everybody should be hell bent upon
punishing it with retrospective effect?”
On the current Scenario of its case on OFCD
issue, Sahara explained that almost 3 years back it had voluntarily declared
through a reputed Charted Accountant Firm that the liability, along with
interest, of these two companies was Rs. 24,000 crores.
Sahara, which apprehended public violence across
the country, began to refund the deposits much before that Supreme Court
judgment of August 31, 2012 and some payments dragged up to September 20, 2012.
Thus, Sahara’s liability was reduced to just Rs. 2,610 crores. Sahara also
declared the Rs. 2500 crores as buffer amount subject to final
verification of amounts. These figures were also certified by the same CA
firm that declared the original liability of Rs 24,000 crores.
Following the Supreme Court order, Sahara
deposited Rs 5120 crores with SEBI but the regulator is yet to pay to the
investors. Is this the SEBI way of protecting the interest of small investors?
Sahara pointed out that SEBI accepted the
liability figure of Rs. 24,000 crore as suited them and was not ready to accept
the updated figure of Rs 2610 crores. Both the figures have been provided by
Sahara itself and they are not come out as a result of any investigation by
SEBI or any other body. Moreover, SEBI is supposed to refund about Rs 2000
crore to Sahara after refunding Rs 2610 crore to investors.
“It
is important to note that there has been not a single complaint against Sahara.
Had the payments not been made, there would have been violence and complaints
throughout the country,”
Sahara said and pointed out that nothing of this sort has happened.
Sahara said that the future of over 11 lakh
workers is at stake and all that the company wants is justice.
For details the following link can also be consulted - http://sahara.in/furtherprecedents/
