SEBI to banks: Attach accounts and lockers of Sahara group firms, chief Subrata Roy

Sahara Group Chairman Subrata Roy gestures as he arrives at the Securities and Exchange Board of India headquarters in Mumbai in this file photo.

The Securities and Exchange Board of India (SEBI) on February 1 issued a notice directing all banks to attach the bank accounts, as well as lockers, held by two group firms of the Sahara group. It also directed the attachment of bank accounts and lockers of its chief Subrata Roy and three others.

The notice has been issued in pursuance of a penalty of Rs 6.48 crore levied by the market regulator in an order dated June 27, 2022.

The banks have been directed to restrict all debit transactions from the accounts. However, credit transactions, if any, are to be permitted.

In its order dated June 27 of last year, SEBI observed that two companies forming part of the  ‘Sahara Group’ namely,  Sahara India Real Estate Corporation  Limited,  now known as  Sahara Commodity  Services Corporation Limited, and Sahara Housing Investment Corporation Limited had issued Optionally Fully Convertible Debentures during 2008 and  2009. These OFCDs were allegedly issued in contravention of the provisions of the Securities and Exchange Board of India Act, 1992, SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 and other key regulations.

The market regulator noticed that the two companies raised sizable amounts of money from the public without conforming to the prudent disclosure requirements and other investor protection norms/requirements which govern public issues.

SEBI had levied a total penalty of Rs 6 crore on the Sahara group companies as well as its key managerial personnel. The amount of Rs 48 lakh is interest that has been levied from June 2022 to January 2023.