SAT rejects Sahara appeals, orders refund of money to investors

Rejecting the appeals of Sahara Groupcompanies, the Securities Appellate Tribunal (SAT) on Tuesday asked them torefund the money raised through Optionally Fully Convertible Debentures (OFCD )to investors within six weeks.

"...both the appeals are dismissed...The appellants inboth the appeals shall now repay within six weeks from today the amountcollected from investors on the terms as set out by the whole time members (ofSebi) in the impugned order," SAT said in its order.

While dismissing the appeal filed by Sahara Group companiesagainst the Sebi order, it held that the market regulator has jurisdiction oversuch fund raising schemes.

"...we may mention that in view of our findings thatOFCDs issued by the company are securities and that the issue was a publicissue requiring mandatory listing and that Sebi has the jurisdiction under theSebi Act to deal with all kinds of securities and companies, whether listed ornot...", the order said.

It could not be immediately ascertained how much money the Sahara companies would have to refund to investors whohad parked their funds as OFCDs.

SAT has given the two companies - Sahara India Real EstateCorporation (now known as Sahara Commodity Services Corporation Ltd) and theSahara Housing Investment Corporation - six weeks to return the money.

The Securities and Exchange Board of India (Sebi) had inJune asked the two Sahara group entities toreturn money collected from millions of investors through a financial instrumentOFCD citing violation of regulatory norms.