SEBI Files 2nd Contempt Petition Against Sahara

Earlier this week Sebi filed a second contempt petition against the Sahara Group, alleging non-compliance of the order delivered by the Chief Justice of India on December 5. Today, an earlier contempt petition was heard by another bench and notice has been issued to Sahara. CNBC-TV18's Menaka Doshi reports.

THE FIRST CONTEMPT PETITION...
On 31ST August, 2012, a Supreme Court bench of Justice Radhakrishnan and Justice Khehar passed a seminal order. (More details) 
They not only ruled that SEBI has jurisdiction over the  optionally fully convertible debentures (OFCDs) issued by 2 unlisted Sahara group companies (Saharas)... they also laid out comprehensive directions on when and how the Saharas were to pay SEBI the over Rs. 25000 crores collected via OFCDs and how SEBI should in turn verify and repay Saharas’ OFCD investors. The order gave Saharas 10 days to submit investors documents to SEBI and 3 months to make the payment. But the 2 Sahara companies missed the first court deadline to hand over investor documents. In November 2012 SEBI filed a contempt petition against Sahara and that contempt petition, which was supposed to come up for hearing in December, came up today. Today (6th February, 2013) the Supreme Court bench heard the matter and has given Saharas notice to respond to the November 2012 contempt petition. THE SECOND CONTEMPT PETITION...
On 5TH December 2012, after a rather controversial hearing (more details) Saharas managed to get the August 31st order modified/amended. A Supreme Court bench headed by Chief Justice Altamas Kabir gave Saharas 15 days to submit the investor documents to SEBI. It also amended the payment schedule. Rs. 5120 crores were to be paid immediately, Rs. 10,000 crores by the first week of January 2013 and the remaining by this week (the first week of February 2013).
Saharas paid the Rs. 5120 crores (they claim that is the only amount outstanding to OFCD investors...the remaining over Rs. 20,000 crores has been redeemed). It then started the process of handing over investor documents but that was not completed in the stipulated time of 15 days. Thereafter Saharas failed to meet the January payment deadline. Also read: Sahara: Twice In Contempt; No Action!
So earlier this week SEBI filed a second contempt petition* against Saharas for non-compliance with the Supreme Court order of 5th December. On account of not submitting all the documents in time and not making the payment due in January. Saharas now stand accused of being in contempt of 2 Supreme Court orders (August 31st & December 5th)
*SEBI did not confirm that it has filed a second contempt petition. Saharas’ lawyers said they had not received any such notice. WILL SAHARAS MEET THE FEBRUARY DEADLINE?
Most unlikely. Because Saharas have filed an interim application which is expected to be heard on Friday (February 8th). Conversations with Sahara lawyers indicate that the application says that despite the December 5th order granting them 15 days to submit investor documents...SEBI accepted documents only for 10 days (December 10-20). Saharas would like more time to complete document submission. The interim application is also likely to argue that most of the OFCD investors have been repaid. Only Rs. 2626 crores worth of OFCDS are outstanding and Saharas’ December 5th payment of Rs. 5120 crores already covers more than that amount. Hence Saharas should not be asked to 'double pay'. Instead they are willing to offer some sort of security - one the court will accept.