SEBI issues Notice: Directs Banks to Attach Accounts and Lockers of Sahara Group Firms

SEBI issues Notice: Directs Banks to Attach Accounts and Lockers of Sahara Group Firms

The Securities Exchange Board of India (in short SEBI) issued official notice ordering all banks to attach the bank accounts, DEMAT accounts as well as lockers, held by two group firms of the Sahara group. It also directed the attachment of bank accounts and lockers of its chief Subrata Roy, Ashok Roy Choudhary, Dubey and Bharrgava.

The Notice was issued in consonance to the order passed by the market regulator on 27th June, 2022 which imposed a penalty of Rs. 6.48 crore.

Additionally, the banks have been ordered to block all debit transactions from the accounts, but credit transactions are still permitted.

The SEBI vide its order dated 27th June, 2022 had found that two companies forming part of the 'Sahara Group' namely, Sahara India Real Estate Corporation Limited, presently known as Sahara Commodity Services Corporation Limited, and Sahara Housing Investment Corporation Limited had issued Optionally Fully Convertible Debentures (in short OFCDs) during 2008 and 2009. These OFCDs were allegedly issued in violation to the provisions laid under the Securities and Exchange Board of India Act, 1992, SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 and other key regulations.

SEBI had noted that the two companies had raised substantial amount of funds from the public without complying the mandatory disclosure requirements and other investor protection norms/requirements which govern public issues.

In December, 2022 the market regulator had directed the attachment of bank and DEMAT accounts of the Sahara Group firm and its chief Subrata Roy to recover Rs. 6.42 crore in the case pertaining to the flouting of regulatory norms.

SEBI had levied a total penalty of Rs. 6 crore on the Sahara group companies as well as its key managerial personnel. The amount of Rs. 48 lakh is interest that has been levied from June 2022 to January 2023.