sebi:WTM/MPB/EFD-1-DRA-III/56/2018
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Facts / Headnote
Directions issued: joint and several refund of OFCD monies with 15% interest; debarment of promoter; proceedings against deceased directors not abated; matter forwarded to MCA/RoC and Local Police
Provisions invoked
- s. 19
- s. 12
- s. 62
- s. 63
- s. 55A
- s. 73
- s. 28A
- s. 4A
- s. 67(3)
- s. 67
- s. 117B
- s. 2(24)
- s. 56
- s. 73(2)
- s. 465
- s. 58
- s. 67(1)
- s. 67(2)
- s. 73(1)
- s. 60
Regulations
- Reg. 107
Parties
- M/s Sahara India Commercial Corporation Limited (SICCL)
- M/s Sahara India (arranger)
- Shri Subrata Roy Sahara
- Shri O.P. Shrivastava
- Shri J.B. Roy
- Lt.Gen.(Retd.) A.S. Rao
- Lt. Col. (Retd) D. S. Thapa
- Shri P.S. Mishra
- Shri Y.N. Saxena
- Shri Ranoj Das Gupta
Holding
SICCL's OFCD offer constituted a public issue under the first proviso to section 67(3) of the Companies Act, 1956, and SICCL and its directors (including legal representatives of deceased directors) are jointly and severally liable to refund the amounts collected with interest at 15% per annum for non-compliance with sections 56, 62, 73 and 117C of the Companies Act, 1956 and DIP Guidelines read with ICDR Regulations.
Full text
Order in the matter of M/s Sahara India Commercial Corporation Limited Page 2 of 54 S.No. Name of the Entity PAN CIN/DIN 15. M/s Sahara India (and its constituent partners) AAMFS0216L NA
Order in the matter of M/s Sahara India Commercial Corporation Limited Page 3 of 54 Companies Act, 1956 (Companies Act); Securities and Exchange Board of India Act, 1992 (SEBI Act) and the Rules and Regulations framed thereunder. It was observed that SICCL had made an offer of OFCDs in the financial years 1998-2009 (hereinafter referred to as “Offer of OFCDs”) and raised an amount of at least Rs. 14,106 Crores from at least 1,98,39,939 allottees. As per the Prospectus, the issue remained open from July 6, 1998 till June 30, 2008.
Order in the matter of M/s Sahara India Commercial Corporation Limited Page 4 of 54 7. The above Offer of OFCDs and pursuant allotment was public issue of securities in terms of first proviso to section 67(3) read with 67(1) and 67(2) of the Companies Act, 1956. Accordingly, the resultant requirement under sections 56, 62, 63, 68, 73(1), 73(2) and 73(3) and sections 117B and 117C of the Companies Act, 1956 and the relevant provisions of the DIP Guidelines read with ICDR Regulations were not complied with by SICCL in respect of the Offer of OFCDs. Further, M/s Sahara India ("arranger"), is a partnership firm belonging to the Sahara Group with Shri Subrata Roy shown as Managing Partner, in the Partnership Deed received from U.P. Co-operative Bank, which firm has acted as "arranger" to the issue and facilitated the issue as Merchant Banker without being a registered intermediary resulting in the violation of Section 12 of the SEBI Act, 1992 read with SEBI Merchant Bankers Regulations read with Clause 5.4.1 of the DIP Guidelines read with ICDR Regulations.
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Source: SecMarx — sebi:WTM/MPB/EFD-1-DRA-III/56/2018. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.