25,000 Cr Raised; 2 Cr Investors; Yet SEBI Can't Regulate?

I have spent the last two days this week in the Securities Appellate Tribunal listening in to closing arguments in the SEBI v/s Sahara case. Fascinating case this and one that will surely be precedent setting. At the heart of the case lies one simple but very big question- does SEBI have jurisdiction over the optionally fully convertible debentures or OFCDs issued by two unlisted Sahara Group companies in the year 2008?

Now the big piece of information that came to light this week and it was a shocker was that the two Sahara Group companies revealed that they had raised a total of Rs 25,000 crore from 2 crore investors via these OFCD issues. Let me also here lay out, in very brief, the arguments on both sides. Now SEBI says this massive fund raising comes under its jurisdiction as an offer of shares, debentures to 50 or more persons is a public offer under the Section 67 of the Companies Act and offer to the public must be preceded by a listing application as laid out in Section 73 and all listed securities come under SEBI