Download PRESENTATION ON SAHARA SCAM

GROUP MEMBER
Om prakash gupta
Prerana ghimire
Neha dubey
Aniket gupta
Kunal gaur
Gaurav gupta
Sunny gulia
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Sahara India pariwar is an indian conglomerate in
lucknow , India
It has a business intrest in finanace , infrastructure and
housing, media and entertainment.
The company has an estimated market capitalisation of
us$25.94 billion of march 2011.
The group is a major promoter of sports in India such
as Indian hockey team.
The company owns a 42.5% stake in formula one.
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In 2010, two Sahara Group Companies Sahara
India Real Estate Corporation (SIREC) and
Sahara Housing Investment Corporation
(SHIC) were raising large sums of money –
Thousands of Crores from investors by issuing
Optionally Fully Convertible Debentures to the
public.
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These two companies were raising thousands
of crores but SEBI was not fully aware of why
they were doing so or what they were doing
with the collected money. Ideally speaking,
before such an issue happens, the company is
expected to file a request with SEBI, get it
approved and then start the collection of public
money.
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Mr. Abraham review DRHP , to raise equity for real
estate company sahara prime city ltd through an initial
public offering (IPO).
DRHP disclose details of two associate group
companies (SIREC and SHIC) raising funds from
public through optionally fully convirtable debentures.
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So, when SEBI found out that two Sahara
Group Cos were raising thousands of crores by
issuing optionally fully convertible debentures
which they were not aware of, they started
digging to find out what exactly is happening.
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SEBI asked the two companies – Sahara India
Real Estate Corporation (SIREC) and Sahara
Housing Investment Corporation (SHIC) to
stop raising money through an order dated 24
November 2010
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Sahara rushed to the Lucknow bench of the
Allahabad High Court, which stayed Sebi's order
but not its investigation. Sebi moved the Supreme
Court, but the apex court too was not of much
help. It merely directed the high court to expedite
the case. The high court vacated its stay only on 7
April 2011, when it found that the Sahara group
was not cooperating with Sebi as it had directed.
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Sahara group challenged SEBI intrusion.
That SEBI is not under juridiction since they are
hybrid instrument- neither shares nor
debentures.
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Of Course Not. Any market related instrument
comes under SEBIs Jurisdiction. SEBI
demolished this argument easily since they
were debentures that could be converted into
shares. This contention was later upheld by the
Securities Appellate Tribunal and the supreme
court in 2012.
Sahara’s counter to the Private placement point
was - when Sahara offices and agents were
busy hawking these OFCDs, and when the two
companies SIREC and SHIC had over 6 million
investors, the offers can’t possibly be
considered as a private placement.
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Absolutely Not. Before the OFCD Issue starts,
according to the Schedule II of the Companies Act of
India, SEBI has to Review and Vet the DRHP of the
company. The Schedule also specifies that, when the
company files its DRHP, the Company Directors have
to file a Declaration saying that they have complied
with all provisions of the Companies Act and the SEBI
guideline.
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In reality, the Directors of these 2 Sahara
companies SIREC and SHIC excluded all
references to SEBI while signing their
declarations. On top of all this, this whole
OFCD Issue had actually started in 2008 for
SHIC and the SIREC Issue had no-closing date.
How can an Issue happen which has no closing
or end date?
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The main reason behind SEBI Asking
companies to follow the guidelines is to protect
the Investor. If some random company starts
issuing stocks or bonds in the market and
dupes investors, who would be responsible? Ya
that’s right SEBI. This is why SEBI has those
guidelines. Plus, unregulated collection of
funds from the public could result in Money
Laundering and other illegal activities which
SEBI is trying to control here…
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SEBI simply asked the following questions:
1 Why are you raising the money?
2 Who are the owners and investors in these companies
that are collecting money?
3 What do you Intend on doing with the collected
money?
4 Why did the OFCD Issue Open without the DRHP
being filed with SEBI?
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Unfortunately NO. They were not able to get straight
answers to questions 1,2, 3,and 4. In fact, they dint
even have a list of Investors who had invested into the
company. To find out the names of its own investors,
SIREC actually needed the help of professional
accounting firms. If the identity of the investors and
addresses themselves are not readily available with a
company how is it practically possible that the issue
was even legit one?
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The courts were totally unhappy about the fact
that the Sahara Group was non-cooperative
throughout the Investigation. The Supreme
Court had directed the group to refund the
money collected by them to the Investors.
Sahara was asked to block or pledge assets
worth 20,000 crores to help SEBI recover the
money and refund it to investors.
On 26 february 2014, the supreme court of India
ordered the arrest of subrata roy, chairman and
founder of Sahara India Pariwar, for failing to
appear in connection with the rs 24000 crore
deposits his company has not refunded to its
investors. UP police on a supreme court
warrant , in a dispute with market regulatorSEBI.
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En.m. wikipedia.com
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Wikipedia of sahara
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www. Slideshare.net-svasani
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Saharascam - scribd
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