Sebi begins arguments in Sahara case

THE SECURITIES and Exchange Board of India (Sebi) begins arguments in the case against chief promoter of Sahara group Subrata Roy, a Sahara group company and its directors for alleged violations of the Companies Act and the Sebi Act. On Tuesday, the Bombay High Court had quashed a trial court order stating that no discharge application will be entertained. The accused have, hence, sought discharge from the case.

Advocate Poornima Advani, representing Sebi, argued that Sahara Real Estate Corporation Ltd had issued optionally fully convertible debentures (OFCD) to the public at large ‘in the garb of private placement without stating correct facts in the prospectus’. The Sebi also alleged that the company had made ‘fraudulently induced large number of persons to invest their monies in the OFCD’. “They issued OFCD to the public without approval of red herring prospectus from Sebi and without listing such OFCDs on the stock exchanges and thereby, committed an offence under the Companies Act,” Advani told court. She also said that the company had failed to provide information sought by Sebi through its summons in August and September 2010 and had committed offences under relevant sections of the Sebi Act, 1992.

During the last hearing, Roy had sought an exemption from appearing in court on grounds of gastroenteretis. The court had directed the doctor, who had issued the medical certificate for Roy, to appear personally on Wednesday to submit whether a patient suffering from gastroenteretis could not attend court proceedings. On Wednesday, the Sebi too filed its objection before the court by claiming that on the day when Roy claimed to have been bed-ridden with the doctor being summoned for a check-up at his Greater Kailash-I residence in South Delhi, he was traveling from Mahipalpur to Gurugram. The Sebi reply also said that gastroenteretis is not an ailment which would make a patient ‘immovable’.

Special Judge M G Deshpande said that he had issued a notice to the doctor ‘only to find out if he (Roy) is cooperating with the trial or taking disadvantage of seeking an exemption on medical ground’. The court observed that the medical record showed that Roy had also been prescribed medicine for ‘acidity’ and a ‘paracetamol’.
Courtesy: IE