Tribunal seeks details of debenture issue by Sahara firms

The Securities Appellate Tribunal (SAT) on Wednesday asked two Sahara Group companies - Sahara India Real Estate and Sahara Housing Investment - to file an affidavit explaining the methodology by which they had raised thousands of crores of rupees from investors through convertible instruments.

The group has been told expected to file the affidavit within two days. This is the third time that the group has been asked to file such details.

The tribunal said it wanted to know the total amount of money raised, the process and the details of investors in the issues of optionally fully-convertible debentures (OFCDs) by the two companies.

The two companies had earlier appealed against an order by the Securities and Exchange Board of India (SEBI) directing them to repay the money raised by issuing OFCDs.

The companies had raised money from the public by issuing optionally fully convertible debentures, a hybrid instrument. The issue of these interest-paying debt instruments, which can be converted into equity shares later, was allegedly in violation of the Companies Act and SEBI regulations.

In an order passed in June this year, SEBI had asked Sahara to refund the money with 15 per cent interest. The two companies were restrained from accessing the capital markets, while Sahara promoter Subrata Roy, Shahra and three directors were restrained from associating with a publicly listed company or any company looking to raise money from the public.