 "Court issues fresh summons to Sahara, its chief Subrata Roy")
**Mumbai:**A magistrate today issued freshsummons to two Sahara Group firms and their top executives,including the organisation chief Subrata Roy, asking them toappear on September 30 in connection with the allegedviolation of regulations of Companies Act and Sebi Act.
The court had earlier taken cognisance of the casefiled by SEBI and issued summons but no report was filedregarding service of summons (by Sebi) to the respondents,following which the court issued fresh summons against them.
The order came on a day when SEBI made a forceful pleain the Supreme Court today to take contempt action againstSubrata Roy along with his two firms and their directors fornot complying with its order for refunding Rs 24,000 crore toinvestors.
[caption id=“attachment_998027” align=“alignleft” width=“380”]  Subrata Roy. AFP[/caption]
The magistrate had on July 7 taken cognisance of SEBI’scomplaint and issued process against the two companies SaharaIndia Real Estate Corp Ltd (SIRECL) and Sahara HousingInvestment Corp Ltd (SHICL) and their top officials undervarious sections of the Companies Act and the Sebi Act.
The relevant sections of the Companies Act deal withmatters related to disclosures made in the prospectus orissue of shares or debentures, criminal liability formis-statements in prospectus, penalty for fraudulentlyinducing persons to invest money and penalty for falsestatements.
Sebi had begun a probe in 2008 after it receivedcomplaints alleging that SIRECL and SHICL were issuingconvertible bonds to the public throughout the countrywithout complying with the applicable statutory requirements.
Impact Shorts
More ShortsIt was later found that the two companies had raised fundsamounting to close to Rs 25,000 crore by allotting OptionallyFully Convertible Debentures (OFCD) to more than 3 croreinvestors without following various statutory and regulatoryrequirements stipulated under the Companies Act and therelevant Sebi regulations.
Subsequently, Sebi passed an order in 2011, directingthe two companies and their promoters and directors to repaythe amount raised through OFCDs to the investors along with a15 per cent interest.
The order was challenged by the companies but it wasupheld by the Securities Appellate Tribunal in October 2011and by the Supreme Court in August 2012.The apex court had also directed these companies todeposit the money with Sebi for further repayment to theinvestors. So far, SIRECL and SHICL have deposited only Rs5,120 crore with Sebi.
The regulator has initiated the processof refund to genuine investors out of the money deposited bythese firms.The firms claimed they have already refunded over Rs20,000 crore to the investors directly and their totaloutstanding liability is less than Rs 5,120 crore depositedwith Sebi.
PTI
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