SEBI issues notice to Sahara, Subrata Roy and others to pay Rs.6.42 crores within 15 days

SEBI issues notice to Sahara, Subrata Roy and others to pay Rs.6.42 crores within 15 days

Warns of imprisonment to recover the amount

in a case pertaining to flouting regulatory norms, the Securities and Exchange Board of India (SEBI) has sent a notice to the Sahara Group, its chief Subrata Roy, and others, directing them to pay Rs.6.42 crores within 15 days. It warned of assets and attachment of bank accounts if they failed to make the payment.

In its June order, the regulatory watchdog had levied a fine totalling Rs.6 crore on five entities - Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation), Subrata Roy, Ashok Roy Choudhary, Ravi Shanker Dubey and Vandana Bharrgava for violating the regulatory norms in the issuance of optionally fully convertible debentures (OFCDs).

The notice came after the entities failed to pay the fine imposed on them.

During 2008-2009, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation had issued OFCDs by raising money through the public issues of securities without following SEBI's norms and procedures intended to protect the interests of the investors.

SEBI had stated that throughout the country, the subscription to OFCDs was solicited by the two companies from the general public, without adequately informing them about the risks involved.

The issuance was allegedly done in contravention of the provisions of SEBI's Issue of Capital and Disclosure Requirements (ICDR) Regulations and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP).

In its recent notice, SEBI directed the five entities to pay Rs.6.42 crores, which includes interest and recovery costs. It has apprised that in the event of non-payment of dues, it would recover the amount by attaching and selling moveable and immovable property of the persons involved and they could face imprisonment.