Paridhi Arya
Published on June 28, 2022 at 18:51 IST
The Securities Exchange Board of India (SEBI) the authority which is regulates the Indian Exchange market had levied Rs 12 crore fines on two companies which belong to Sahara Group of Firms. The companies are Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL).
SEBI alleges that companies had violated the rules in issuance of Optionally Fully Convertible Debentures (OFCD).
To raise the sizable amount from the public the provisions of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) and Issue of Capital and Disclosure Requirement Regulations (ICDR) is contravened in the period of 2008 and 2009.
When offer document was filed with the SEBI by Sahara Prime City then this violation was caught by the SEBI.
The order passed by the SEBI contained that till March 31, 2021 approximately 15,500 crore rupees were recovered by the SIRECL and SHICL out 23,000 crore rupees.
The SHICL and SIRECL had issued OFCD to the public without following the rules or provisions of the norms which are provided so that interest of the investor can be protected.
The Companies didn’t inform the investors regarding the risk attached to the project for which funds are raised by the company, risk in the instrument that is OFCD and risks which company may face in future.
SEBI order states, “Clearly when the Notices falsely represented that the OFCD issue was a private placement of securities, they deprived the investors of the various measures of investor protection which were available to them under the delegated provisions of the Companies Act and ICDR regulations.”