Court rejects Sahara chief's plea seeking discharge from bonds sale case

Special SEBI court noted that there was enough material on record to frame charges against the accused.

Published: 22nd November 2019 08:03 PM  |   Last Updated: 22nd November 2019 08:03 PM   |  A+A-

Subrata Roy

Sahara Group chief Subrata Roy (File | AFP)

By PTI

MUMBAI: A special court here has rejected the applications filed by Sahara Group chief Subrata Roy and three others, seeking discharge from a case pertaining to sale of bonds to the public in violation of securities rules.

Special SEBI court had while rejecting the applications earlier this month, noted that there was enough material on record to frame charges against the accused.

"Having regard to the facts of the case, documentary evidence on record, in my opinion, the accused persons have not made out a prima facia case for discharge," Judge M M Umar said in the order.

Besides Roy, two group companies - Sahara Housing Investment Corporation and Sahara India Real Estate- and their three directors are named as accused in the case.

Roy and the three directors had filed applications in the court seeking discharge from the case.

The case relates to the issue of Optionally Fully Convertible Debentures (OFCD) by the companies.

Sahara Housing Investment Corporation had passed resolutions under relevant provisions of the Companies Act for raising funds through the issue of unsecured OFCD by way of the private placement to friends, associates, group companies, workers and any other affiliated companies of Sahara Group.

As per the allegation, the accused company had issued the OFCD to more than 75 lakh subscribers, which is in excess of the limit of 49 persons for private placement.

As per the provisions of the Companies Act, private placement can only be made to not more than 50 persons.

Therefore, OFCDs issued by the accused was a public issue in the guise of private placement.

As per the affidavit filed by the accused company before the Securities Appellate Tribunal (SAT), it collected an amount of Rs 6,380.50 crore through issue of OFCDs from November 2009 to April 2011.

The other group company had allegedly collected Rs 19,400 crore from over 2 crore investors in a similar way between April 2008 to 2011.

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