This Article is From Feb 14, 2013

Sahara's clarification on Sebi action over Rs 24,000 crore refund to investors

Sahara's clarification on Sebi action over Rs 24,000 crore refund to investors
New Delhi:
The Securities and Exchange Board of India (SEBI) ordered a freeze on the assets and bank accounts of two Sahara Group companies today, saying they failed to heed a Supreme Court order to repay billions of dollars collected from investors in outlawed bonds.

The market regulator also ordered a freeze on all bank accounts and properties in the name of the Sahara Group founder, Subrata Roy, and three other directors of the two firms, according to two separate orders posted on the regulator's website. Full story: Sebi orders freezing of bank accounts of Subrata Roy, two group firms

In response, Sahara has issued the following statement:

As per Sahara, the total liability is not likely to exceed Rs. 5,120 crore, which has already been deposited with SEBI. As regards the instalments to be deposited with SEBI as per the order of the Supreme Court, Sahara has filed interim application before the Supreme Court interalia praying that Sahara be permitted to furnish security through a credible financial institution instead and in place of the payment of the balance instalments, since Sahara has already redeemed significant number of OFCD Holders and any further payments to SEBI would amount to double payment. The said interim application is pending and is likely to come up next week.

Further, today's order of SEBI for attachment of the assets is based on old facts and details of assets as of January, 2012. Since, then facts have changed in view of redemptions made by Sahara from time to time. This fact of redemption was known to SEBI. Hence, today's order does not take into account the changed facts and circumstances.

As per the order of the Supreme Court, the liability to refund the money is of SIRECL and SHICL. Hence, attachment, of assets of the individuals by SEBI is incorrect. Whereas not only company has paid to SEBI enough amount which is much higher than outstanding liabilities of two companies, the fact also remains in the whole affair Sahara is genuinely concerned for investors.