The Hindu : Business : Apex court refuses to stay Sahara's plans

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Wednesday, Jan 05, 2011
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Apex court refuses to stay Sahara's plans

NEW DELHI: The Supreme Court on Tuesday refused to stay the fund raising exercise of two Sahara group firms as sought by the Securities and Exchange Board of India, but allowed the market regulator to seek information on investors' details from the companies.

Two Sahara group companies — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — are planning to raise Rs.20,000 crore each from the market through optionally fully convertible debentures (OFCDs).

SEBI had barred the Sahara group firms from raising funds and had sought details of their investors. Sahara had challenged it before the Allahabad High Court, which, in an interim order, stayed the ban. Sahara had argued that only the Registrar of Companies (RoC) might pass such an order and not SEBI. SEBI moved the apex court against the high court staying the ban. “We make it clear that SEBI is entitled to call for any information which it deem fit, including the names of investors who have invested in OFCDs,” a bench headed by the Chief Justice S. H. Kapadia said.

On the plea of SEBI's counsel Arvind Dattar and P. Venugopal to restrain the Sahara group companies from raising money through debentures till the high court decides on the matter as investors may suffer, the Supreme Court said it should be left to the investors only.

“Investors are clever nowadays... If they invest then that should be at their own risk,” the bench said asking SEBI to bring out an advertisement informing investors that the matter was sub judice.

The apex court also declined to stay the proceedings at the high court.

“However, in view of the stakes involved, including protection of investors, we are directing the high court to proceed for day-to-day hearing without adjourning the matter,” the apex court said. The bench also directed SEBI to file its reply before the high court by January 7.

It also asked the RoC to file its response before the Allahabad High Court by January 7, where the matter is still going on. — PTI

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