New Delhi: The Supreme Court on Tuesday dismissed Sebi’s appeal against an interim order of the Allahabad High Court staying the market regulator’s decision to ban some Sahara group entities from raising public funds.
The development comes as a relief to Sahara which is now free to raise funds from the public. The apex court observed that while Sahara was free to share information sought by Sebi with the regulator, this was not a compulsion.
Sebi had challenged the Allahabad HC’s order staying the regulator’s November 24 decision to ban several Sahara group entities from raising money from the public for allegedly violating public issue norms and refusing to cooperate with Sebi.
Disposing of Sebi’s appeal, an SC Bench comprising Chief Justice SH Kapadia and Justices KS Radhakrishnan and Swatanter Kumar said it would not like to interfere with the interim order of the HC.
When the Sebi counsel cited non-availability of information from Sahara, which was countered by Sahara by saying Sebi lacked jurisidiction over an unlisted company, the Bench said that the group could provide information sought by the market regulator without prejudice to its contention before the HC, which is scheduled to hear the issue on January 12.
Sahara, in its challenge to Sebi’s November 24 order before the Lucknow Bench of the HC, had termed the action of market regulator as ex-parte and hence violative of principles of natural justice. It had also argued that Sebi lacked jurisdiction over the group companies as they were neither listed nor intending to list their shares in the stock exchanges.
The Sahara group had raised Rs 4,843.37 crore through sale of debentures and the interest accrued and the interest due for payment to these debenture holders was Rs 541.79 crore as of 30 June, 2010.
The HC in its interim order had stayed the Sebi order and told Sebi not to take a final decision in the inquiry during the pendency of Sahara’s petition.
The HC had also directed the Registrar of Companies (RoC) to investigate the matter in the interest of investors and submit a status report. It directed Sahara to provide necessary information to the RoC in three weeks.
The development comes as a relief to Sahara which is now free to raise funds from the public. The apex court observed that while Sahara was free to share information sought by Sebi with the regulator, this was not a compulsion.
Sebi had challenged the Allahabad HC’s order staying the regulator’s November 24 decision to ban several Sahara group entities from raising money from the public for allegedly violating public issue norms and refusing to cooperate with Sebi.
Disposing of Sebi’s appeal, an SC Bench comprising Chief Justice SH Kapadia and Justices KS Radhakrishnan and Swatanter Kumar said it would not like to interfere with the interim order of the HC.
When the Sebi counsel cited non-availability of information from Sahara, which was countered by Sahara by saying Sebi lacked jurisidiction over an unlisted company, the Bench said that the group could provide information sought by the market regulator without prejudice to its contention before the HC, which is scheduled to hear the issue on January 12.
Sahara, in its challenge to Sebi’s November 24 order before the Lucknow Bench of the HC, had termed the action of market regulator as ex-parte and hence violative of principles of natural justice. It had also argued that Sebi lacked jurisdiction over the group companies as they were neither listed nor intending to list their shares in the stock exchanges.
The Sahara group had raised Rs 4,843.37 crore through sale of debentures and the interest accrued and the interest due for payment to these debenture holders was Rs 541.79 crore as of 30 June, 2010.
The HC in its interim order had stayed the Sebi order and told Sebi not to take a final decision in the inquiry during the pendency of Sahara’s petition.
The HC had also directed the Registrar of Companies (RoC) to investigate the matter in the interest of investors and submit a status report. It directed Sahara to provide necessary information to the RoC in three weeks.
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