The Supreme Court on Thursday agreed to hear a plea filed by the Securities and Exchange Board of India (SEBI) challenging a portion of an order passed by the Securities Appellate Tribunal (SAT), which granted relief to four managers and the company secretary of Sahara India Commercial Corporation Ltd (SICCL).
A bench comprising Chief Justice Surya Kant and Justice V. Mohan directed that the matter be tagged with pending petitions on the issue and listed for hearing in July.
On March 9, SAT upheld SEBI's regulatory action against SICCL and dismissed appeals filed by the company and its directors in connection with the alleged illegal issuance of optionally fully convertible debentures (OFCDs).
The three-member tribunal held that the OFCDs issued by SICCL between 1998 and 2008 amounted to a public offer, thereby bringing them within SEBI's regulatory jurisdiction.
SAT noted that SICCL had mobilised approximately Rs 14,106 crore from nearly 1.98 crore investors through these debentures during the period. It further held that such large-scale fundraising from an enormous investor base could not be characterised as a private placement, as claimed by the company.
While dismissing the appeals filed by SICCL and its directors, the tribunal allowed a separate appeal by four managers and the company secretary, holding that they could not be held liable for the company's actions merely in their capacity as employees.
The tribunal also observed that the prospectus had been signed by the company secretary under powers of attorney granted by the directors, who, as principals, remained responsible for the acts of their agent.
SEBI has now challenged this part of the SAT ruling before the apex court.
The case arises from an October 2018 SEBI order directing SICCL to refund the money raised through the debentures, disclose details of its inventory, and barring certain officials from accessing the securities market.