sebi:WTM/PS/26/IMD/DoF-III/JULY/2015

SEBI · SEBI · 2011-10-18 · Prashant Saran, Whole Time Member

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Facts / Headnote

Cancellation of Certificate of Registration of Sahara Mutual Fund effective on expiry of six months from date of order, with interim directions not to take new subscriptions, to transfer sponsor/AMC activities to new sponsor/SEBI-approved AMC, trustees to oversee unitholder protection and be reconstituted on transfer, return certificate on expiry, and compulsorily redeem units and wind up if transfer not effected.

Provisions invoked

• s. 11
• s. 19
• s. 27
• s. 12
• s. 24(1)

Regulations

• Reg. 10
• Reg. 22
• Reg. 28(2)
• Reg. 21
• Reg. 23
• Reg. 7
• Reg. 24
• Reg. 27
• Reg. 28(1)
• Reg. 2(g)
• Reg. 9
• Reg. 32(2)
• Reg. 75
• Reg. 25(12)(a)
• Reg. 25(12)
• Reg. 68

Parties

• Sahara Mutual Fund
• Sahara Asset Management Company Private Limited
• Sahara India Financial Corporation Limited (Sahara Sponsor)
• Mr. S.R. Hegde - Trustee
• Mr. P.V. Rao - Trustee
• Mr. A.K. Thakur - Trustee
• Dr. P.P. Shastri - Trustee

Holding

Sahara Mutual Fund along with Sahara Asset Management Company Private Limited and its trustees and Sahara India Financial Corporation Limited (Sponsor) are no longer 'fit and proper persons' to carry on mutual fund business, and the Certificate of Registration of Sahara Mutual Fund is cancelled effective on expiry of six months from the date of the order subject to interim investor-protection directions.

Full text

Page 2 of 22 (hereinafter referred to as 'SIRECL') and Sahara Housing Investment Corporation Limited (hereinafter referred to as 'SHICL') to refund the money collected through Optionally Fully Convertible Debentures (OFCDs) from the investors. Vide this order, Mr. Subrata Roy Sahara, Ms. Vandana Bharagava, Mr. Ravi Shankar Dubey and Mr. Ashok Roy Choudhary, being the promoters/ directors of SIRECL and SHICL also were restrained from associating themselves with any listed public company and any public company which intends to raise money from the public, till such time the aforesaid payments were made to the satisfaction of SEBI. This order of SEBI was confirmed by the Hon'ble Securities Appellate Tribunal (hereinafter referred to as the 'Hon'ble SAT') vide its order dated October 18, 2011. Thereafter, the appeals filed by SIRECL and SHICL before the Hon'ble Supreme Court of India vide order dated August 31, 2012 also got dismissed.

Page 3 of 22 activities to another person holding a valid 'certificate of registration' to carry on such activity and allow the clients/ investors to withdraw/ transfer their securities or funds held in the custody or to withdraw any assignment given to these, without any additional cost to such client/ investor, as specified in Regulation 32(2) of Intermediaries Regulations or as deemed fit. The noticees were advised to reply to the SCN within twenty one (21) days from the receipt thereof. SEBI informed the noticees that in case of failure to reply, it would be presumed that they had no reply to offer and that the matter would be proceeded on the basis of the evidence available on record. A copy of the Enquiry Report was also forwarded to the noticees along with the said SCN.

Page 4 of 22 appropriate to hear the matter as it will impinge upon the pending judicial proceedings of SIRECL before the Hon'ble Supreme Court. Any order passed by SEBI in the present proceedings, will have bearing upon the status of parties and stage of proceedings pending before the Hon'ble Supreme Court, which are yet to attain finality. Sahara AMC requested that the present proceedings may be postponed till the culmination of all the proceedings in the matter of SIRECL vis-a-vis SEBI before the Hon'ble Supreme Court.

Source: SecMarx — sebi:WTM/PS/26/IMD/DoF-III/JULY/2015. 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.