Sebi cautions investors against dealings with Sahara

Close on the heels of ordering attachment of bank accounts, investments and all other assets of two Sahara group firms and their promoters, including group chief Subrata Roy, market watchdog Securities and Exchange Board of India (Sebi) on Friday cautioned the investors and general public against transacting with these companies and persons.

"Anyone transacting with them (Sahara India Real Estate Corp Ltd, Sahara Housing Investment Corp Ltd and their three promoters and directors) would be doing so at their own peril," Sebi said.

The regulator said that in furtherance to a Supreme Court order directing refund of investors' money collected by these Sahara firms, it has ordered "attachment of all moveable and immoveable properties, bank accounts and demat accounts of these two companies and that of its promoters and directors namely Subrata Roy Sahara, Vandana Bhargava, Ashok Roy Choudhary and Ravi Shankar Dubey."

"Investors and general public are advised to exercise caution and take note of the said orders before transacting with the aforesaid entities/persons in any manner whatsoever," it said in a public notice.

On February 13, Sebi passed two separate orders, together running into 160 pages, directing attachment of properties and freezing of accounts.

It was after the Supreme Court said that the regulator was free to freeze the accounts and attach properties if Sahara firms were not complying with the apex court's earlier orders of August 2012 towards refund of investors' money totaling over Rs 24,000 crore.

The assets ordered to be attached included those related to the group's Aambey Valley resort town near Pune, other real estate assets in Delhi, Mumbai and at other places across the country, shares, mutual funds and various other investments.

Passing the attachment orders, the market regulator said that the two companies had raised Rs 6,380 crore and Rs 19,400 crore, respectively from bondholders and "various illegalities" were committed in raising of these funds.

With regard to Subrata Roy and three other directors, namely Vandana Bhargava, Ravi Shanker Dubey and Ashok Roy Choudhary, Sebi ordered freezing of all bank and demat accounts of these four persons, as also attachment of all moveable and immoveable properties in their name with immediate effect.

Subsequently, the Sahara Group claimed that the actions taken by Sebi were based on "old facts" and the orders for attaching assets of individuals is incorrect on part of the market regulator.

It also said that it has already deposited with Sebi an amount of Rs 5,120 crore that was in excess of its total liability towards refund to investors.

Later, the group also ran a major advertisement campaign in newspapers with claims that "Sahara has nothing to pay (and) rather Sahara shall soon be eligible to take a big refund from Sebi" and it was submitting to Sebi the provisional balance sheets of two companies as on December 31, 2012 for more clarity on the matter.

The Supreme Court on August 31, 2012 had asked Sahara group firms to refund the money with 15 per cent interest and had asked Sebi to facilitate the refund.

However, the group in December, 2012 was allowed to pay the money in three instalments, including an immediate payment of Rs 5,120 crore, followed by an installment of Rs 10,000 crore in the first week of January and remainder by the first  week of February 2013.

Sebi in its attachment orders, however, said that neither of the two instalments was paid and therefore it is constrained totake necessary action as per the Supreme Court orders.

The properties being attached by Sebi include the land owned by Sahara group firm Aamby Valley Ltd, which has set up a resort village near Pune, development rights of land at prime locations in Delhi, Gurgaon, Mumbai and various other places across the country.

Besides, Sebi has also ordered attachment of equity shares held in Aamby Valley Ltd, units of mutual funds, bank and demat accounts and investments in all the branches of all banks.

Sebi has asked all the banks to transfer the amounts lying in the accounts of these entities and persons to a specially-created Sebi-Sahara refund account.

Sebi has also informed the Reserve Bank of India and Enforcement Directorate as well regarding its actions against Sahara group firms. The assets being attached include investments of SIRECL and SHICL in group companies, special purpose vehicles and partnership firms and the necessary orders for sale of all attached properties would be passed in due course after getting their full particulars, Sebi said.