Court rejects Sahara chief's plea seeking discharge from bondssale case

Mumbai, Nov 22 (PTI) A special court here has rejectedthe applications filed by Sahara Group chief Subrata Roy andthree others, seeking discharge from a case pertaining to saleof bonds to the public in violation of securities rules.

Special SEBI court had, while rejecting theapplications earlier this month, noted that there was enoughmaterial on record to frame charges against the accused.

'Having regard to the facts of the case, documentaryevidenceonrecord, in my opinion the accused persons havenotmade outaprimafaciecasefor discharge,' Judge M M Umarsaid in the order.

Besides Roy, two group companies- Sahara HousingInvestment Corporation and Sahara India Real Estate- and theirthree directors are named as accused in the case.

Roy and the three directors had filed applications inthe court seeking discharge from the case.

The case relates to the issue of Optionally FullyConvertible Debentures (OFCD) by the companies.

Sahara Housing Investment Corporation had passedresolutions under relevant provisions of the Companies Act forraising funds through the issue of unsecured OFCD by way ofprivate placement to friends, associates, group companies,workers and any other affiliated companies of Sahara Group.

As per the allegation, the accused company had issuedthe OFCD to more than 75 lakh subscribers, which is in excessof the limit of 49 persons for private placement.

As per the provisions of the Companies Act, privateplacement can only be made to not more than 50 persons.

Therefore, OFCDs issued by the accused was a public issue inthe guise of private placement.

As per the affidavit filed by the accsued companybefore the Securities Appellate Tribunal (SAT), it collectedan amount of Rs 6,380.50 crore through issue of OFCDs fromNovember 2009 to April 2011.

The other group company had allegedly collected Rs19,400 crore from over2 croreinvestors in a similar waybetween April 2008 to 2011. PTI AVINP NP