Alert! Sebi bars two Sahara firms

The Securities and Exchange Board of India has restrained Sahara Real Estate Corporation (SRECL) and Sahara Housing Investment Corporation (SHCIL) from mobilising funds from the public. This is in regard to raising of money by the group through issue of optionally fully convertible debentures (OFCD) and withholding such information from the regulator. The regulator has also barred promoters of these entities namely Subrata Roy Sahara and Ravi Shankar Dubey among others from soliciting money from the public till further directions. They have been further asked to show cause “as to why action should not be initiated against them including issuance of directions to refund the money solicited and mobilised through the prospectus issued with respect to the impugned OFCDs”. The company had earlier stated sicne these OFCDs were privately placed with their friends,relatives and associated persons,they were not required by law to disclose it with the market regulator,Sebi in its order said,“The issuance of OFCDs by the companies to more than 50 investors is a public issue and therefore,these securities are liable to be listed on a recognized stock exchange under the provisions.” The regulator in its order further stated that the Red Herring Prospectus (RHP) filed by the SIRECL and SHICL do not contain such declaration in toto as prescribed. The declaration so contained in the RHPs of the companies seems to have deliberately omitted all reference to the compliance to be made by them of the guidelines or rules made under the Sebi Act.