Investors feel cheated like in Harshad scam: SC to Sahara

The Supreme Court asked the Security and Exchange Board of India to proceed with its probe into Sahara group’s OFCD scheme. The apex court said that it will wait for the market regulator to come up with its findings while observing that it does not want investors to feel “cheated” like in the Harshad Mehta scam. Pointing out repeatedly that “till today,I do not know what is OFCD”,Chief Justice of India SH Kapadia at the head of a three-judge bench,said the court wants to know the findings of the market regulator on the group’s OFCD (Optionally Fully Convertible Debentures) scheme. The court also allowed Allahabad High Court to proceed with its hearing,where the Sahara group has challenged Sebi’s direction asking the Sahara details of investors of the scheme. “Till today,I do not know what is OFCD. We want Sebi to decide,” the CJI observed in open court. “Investors are not aware of OFCD. At the end of day,they would come and say that they were cheated... We know what happened in the Harshad Mehta case,” the bench observed. The bench was not impressed by Sahara’s submissions that the OFCD scheme did not come under the purview of the Sebi Act. OFCDs are a type of bond with the option to fully convert them into equity at a rate decided by the company.