The document summarizes the timeline of events in the legal battle between the Sahara India conglomerate and SEBI regarding the repayment of Rs. 24,000 crore to investors in optionally fully convertible bonds. Key events include the Supreme Court ordering Sahara to repay the amount in 2012, SEBI freezing Sahara accounts and seizing properties in 2013 when repayment was not made, and the Supreme Court extending the parole of Sahara chief Subrata Roy but insisting he pay Rs. 600 crore by February or face arrest. The legal issues involve whether the bonds were a public issue requiring regulatory approvals.

1. THE SAHARA SCAM
Presented By:
Harleen Kaur 309
Vani Khattar 310
Naveen Kumar 287
Sandeep Anand 290

2. The Sahara India Pariwar: An
Introduction
O Sahara India Pariwar is an Indian
conglomerate headquartered in
Lucknow,India.
O It was started by Mr. Subrata Roy in
1978.
O It has business interests in finance,
infrastructure and housing, media and
entertainment, consumer
merchandise retail venture,
manufacturing and information
technology.
O The group operates 4,799
establishments under the Sahara
India umbrella.

3. The Rise
O The group is a major promoter of sports in India
and was the main sponsor of the Indian cricket
team.
O It owns a 42.5% stake in Formula One’s Force
India Formula 1 Team and also sponsors India
national field hockey team.
O Sahara India Pariwar’s Sahara Q Shop entered
into the Guinness World Records when it opened
315 outlets in 10 states of India, just at one time on
April 1, 2013.

5. THE TIMELINE……..

6. Let’s start..
 August 31st ,2012
SC orders Sahara to repay 24,000 cr back
to its investors
 October 19th ,2012
SC clears SEBI’s action on Sahara
 November 12th ,2012
SEBI began prosecution proceedings
against Sahara
 November 30th ,2012
Sahara submits drafts worth 5,000 cr in
SC

7. In progress...
 December 5th ,2012
SC orders Sahara to pay back 24,000 cr with
15% interest to over 30 million investors
 February 6th,2013
SC tells SEBI to freeze accounts of Sahara
and seize property of Sahara group’s 2
companies for defying court orders by not
refunding 24,000 cr to investors.
 February 13th ,2013
SEBI freezes the accounts of Sahara chief
Subrata Roy.

8. Still in progress...
 February 25th,2013
SC refuses to give more time to the Sahara Group
to refund its investor’s money
 March 15th ,2013
SEBI moves SC for arrest of Sahara chief
 April 10th,2013
SEBI quizzes Sahara chief and 3 other directors
 May 2nd,2013
SC stays proceedings on pleas filed by Sahara
Group and Roy in tribunal and high court
 May 8th, 2013
SEBI initiates process of refund to investors on
SC’s orders

9. Still on...
 October 28th,2013
SC says it cannot trust the Sahara Group any more, and
directs the company to submit title deeds of its properties
worth rs. 20,000 cr to SEBI within 3 weeks
 November 20,2013
SEBI says Sahara Group has its assets overvalued and
has not submitted original title deeds of properties
 November 21st,2013
SC bars Subrata Roy , chairman of the company ,and three
other directors from leaving the country and asks not to sell
any of its property till further orders .
 January 2nd ,2014
ROY fails to get permission from SC to travel abroad to
attend his business meetings
 January 9th , 2014
SC warns of a CBI probe against Sahara , if it failed to
reveal the source of Rs. 22,000 cr it claimed to have
refunded to 33 million investors.

10. Timeline ends...
 February 20th ,2014
SC summons Subrata roy on 26th february
 February 26th ,2014
SC issues non-bailable arrest warrent against
Roy for his failure to appear before it in
connection with the case
 February 27th ,2014
Roy offers unconditional apology for not
appearing before the apex court ,
Lucknow police fails to find him at his
residence
 February 28th ,2014
Roy arrested by the Lucknow Police

11. CURRENT SCENARIO
O NEW DELHI: Sahara Chief Subrata Roy was today asked by the Supreme
Court to pay Rs. 600 crore by February if he wants to stay out of jail.
Mr Roy, who is out on parole since his mother's death in May this year, has
been asked to surrender if he cannot pay this money by February 6. His parole
was also extended.
The Sahara group has been engaged in a long legal battle with capital market
regulator Sebi over the refund of Rs. 24,000 crore to investors. Sahara has paid
around Rs. 11,000 crore and submitted a plan saying it will pay the rest of the
money in two and a half years.
"You had said earlier you have properties worth Rs. 1,87,000 properties. But
those don't come to your help for repaying Rs. 20,000 crores," the court said to
Sahara.
Senior lawyer Kapil Sibal, representing Sahara, said the state of the market is
bad. The Supreme Court, however, shot back, "Market business is a matter of
perception. For some it is good, for some it is bad."

12.  Issue of Optionally Fully
Convertible Bonds (OFCD’s) is
legal.
 Issue of OFCD’s is not a public
issue.
 OFDC are neither shares nor
Debentures but “Hybrid” Class
 OFCD’s are “Hybrid Instruments”
cannot be listed.
 Serious error is committed by
SEBI.
 No statutory requirement to list
OFCD

13.  OFCD was public issue
 OFCDs were transferable securities.
 Violation of section 73 of Companies Act 1956.
 The forms issued by the company did not enclose
an abridged prospectus.
 Did not submit Balance Sheet and P&L a/c to the
concerned ROC 11.

14.  Aggrieved Sahara appealed to SAT(Securities
Appellate Tribunal).
 Passed order in favour of SEBI.
 Aggrieved Sahara again moved towards Supreme
court.
 Finally, Supreme court of India passed the
judgment in favour of SEBI.
 Ordered Sahara to repay the Rs. 24000 crore with
15% interest.
 Supreme Court allowed Sahara to pay whole
amount in three instalments
 120 crore immediately, 10,000 crore in January
2013 and remaining amount by February 2013
 But by February they failed to pay second and
third instalment.
 SEBI after getting permission from Supreme
Court froze all bank and Demat accounts and
attaches properties of chief Subrata Roy and three
directors.
 On October 28 2013, Supreme Court directed
Sahara to submit title deeds of properties worth
Rs.20,000 crore to SEBI.

15. ?
How was Sahara
?

16. There are various governance and ethical issues involved in
the collapse which can be discussed as follows:
 Unethical Conduct
 Fraud
 Violation Of Law
 Lack of ‘independence’ of the Directors
 Inadequate role of regulator
 Lack of Transparency
 Political connections of Subrata Roy