Sahara Debacle SC confirms SAT order Directs Sahara to refund Rs17400 crore to investors

The Supreme Court today directed the two Sahara Group companies to refund a sum of Rs. 17,400 crore raised from millions of investors, reconfirming the order of the Securities Appellate Tribunal (SAT)..The Division Bench comprising of Justices K.S. Radhakrishnan and J.S. Khehar has given 3 months time to the two companies, Sahara Commodity Services Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) to refund the amount raised through Optionally Fully Convertible Debentures (OFCDs). The refund amount will include a 15 per cent interest component, giving a huge blow to the Sahara Group..The Apex Court has also directed SEBI to conduct a probe against the two Sahara companies to find out their actual subscriber base..The two Sahara Group companies are required to furnish all their documents and account details before the regulatory body and the Court has appointed Justice B.N. Agarwal, a retired Supreme Court Judge, to oversee the entire probe. The Court has directed the refund amount to be deposited in a Nationalized Bank.The Court in its 270-page judgment, has also made it very clear that if the Sahara Companies fail to comply with the directions of the Court, SEBI can take recourse to all legal remedies, including attachment and sale of properties, freezing of bank accounts etc. for realization of the amount..In June 2011, SEBI had found that the two Sahara companies had raised sizable amounts of money from the public (under the prospectus dated March 13, 2008 and October 6, 2009) without conforming to the prudent disclosure and other investor protection norms, which govern public issues in India..SEBI, in its order, had directed two Sahara group companies, their directors Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary and promoter Subrata Roy to refund Rs. 4,843 crore to the investors with annual interest of 15 percent..It was against this order of SEBI that Sahara Group had filed an appeal before SAT, which subsequently upheld the SEBI order. SAT had directed the Sahara Group companies to refund a sum of Rs. 24,029 crore to the investors within six weeks..Following this SAT order, the Sahara Group Companies had filed the appeal before the Supreme Court..Senior Counsels Fali S. Nariman and Gopal Subramanium appeared for Sahara Group companies, SIRECL and SHICL respectively..Senior Counsel Arvind P. Datar appeared on behalf of SEBI while Harin P. Rawal, Additional Solicitor General appeared for Union of India