SEBI seeks Supreme Court intervention on Sahara's misleading ads

SEBI seeks Supreme Court intervention on Sahara's misleading ads

The company is locked in a prolonged legal battle with the market regulator for allegedly breaching the norms

The Securities and Exchange Board of India (SEBI) has moved the Supreme Court urging that Sahara India Group be refrained from issuing 'misleading' advertisements or statements that 'obstruct' it from implementing the August 2012 order of the court for the refund of over Rs.24,029 crores raised from 33 million bond investors.

The Sahara group, including its chief Subrata Roy, has been issuing advertisements (one being on April 23) in various newspapers, claiming that the amount due to the investors by its firms, including Sahara Credit Cooperative Society Society, Saharayn Universal Multipurpose Society, and Sahara Q-Shop, can be paid from the SEBI-Sahara refund account.

The market regulator urged the Court to direct the Sahara group of entities to restrain from issuing any advertisement or statement in respect of the proceedings in the contempt petition pending before the top court. It accused Sahara of constantly obstructing the public authority from carrying out its statutory duties and implementing the court's directions.

In a fresh application, SEBI claimed, "Sahara's entities have by their various acts and omissions, including by issuance of such defamatory, malicious, and false statements and advertisements, misled genuine investors. The entities continue to wilfully disobey the 2012 judgment and subsequent orders by refusing to deposit the amounts directed and ordered to be deposited in the SEBI-Sahara refund account."

"Sahara has obstructed the implementation of the Supreme Court order, which also amounts to contempt of court," SEBI added.

SEBI has made its best efforts in disbursing the refunds amounts in spite of the continued failure of the contemnors (Sahara group firms, Roy and some directors) in furnishing clarification, explanation and providing information relating to the disputed cases as reflected from time to time in its various status reports, the affidavit stated.

It added, "Nothing further survives in respect of the implementation of the 2012 order, other than further attachment, sale of assets and realization of monies."

The Sahara group has been locked in a prolonged legal battle with SEBI for allegedly breaching the norms in raising over Rs 24,000 crores through bonds. It was directed by the Apex Court to deposit the funds with SEBI to refund the amount to the investors. It maintains having refunded most of the bondholders.