Government backs SEBI order against Sahara firms

Two real estate arms of the Sahara Group – Sahara Housing Invest Corp Ltd and the now defunct Sahara India Real Estate Corp – are sinking deeper in the regulatory mire, as the ministry of corporate affairs (MCA) today supported an order by the Securities & Exchange Board of India against a debenture issue by the two companies.

In an affidavit, the MCA told the Securities Appellate Tribunal (SAT) looking into the issue, ''Both SEBI and MCA work in tandem for protecting the rights of small investors. So the question of technicality of jurisdiction is not the way to look at the issue.''

The SAT is scheduled to hear the matter today under directions from the Supreme Court on 15 July asking Sahara companies to approach SAT if it objected to the SEBI order.

The MCA filed its affidavit before the three-member SAT jury hearing the matter that the Companies Act, which is administered by the MCA, and the SEBI Act, enforced by the corporate regulator, should not be read in contradiction to each other.

One of the Sahara counsel said they were likely to file a rejoinder to the statement.

Sahara had moved SAT on 5 August arguing that SEBI rules do not apply to the debenture issue, since it did not intend to list on the bourses. SAT admitted the appeal and directed the SEBI and MCA to file their responses by 26 August.