Investors may feel cheated like in Harshad scam: SC to Sahara

Posted By: Religare
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{image-13-saharagroup-logo}Supreme Court today rapped Sahara group for launching Optionally Fully Convertible Debenture (OFCD) scheme without informing the investors about the scheme and fully disclosing the terms of investment and compared it to the Harshad Mehta scheme where investors lost fortune by investing into them.

SC asked market regulator Security and Exchange Board of India (SEBI) to look into the matter. SEBI is instructed to investigate the validity and regulatory aspects related to the scheme.

The bench comprising Chief Justice of India SH Kapadia, Justice KS Panicker Radhakrishnan and Justice Swatanter Kumar asked Allahabad court to go ahead with hearing the case where Sahara group challenged SEBI"s request to release the documents related to the details of the investors.

SC questioned the legality and the objectivity based on which OFCD scheme is launched where most of the investors are rural people and the awareness level is very low.

Restrain order passed on 24 November 2010 by SEBI toward issuance of this scheme to raise money from the public, as the terms and conditions needed more clarification.

The Court repeatedly asked Sahara group to make available their brochure and other relevant information which they were giving to their investor through their agents to find the nature of OFCD.

Read more about: investor, sebi
Story first published: Friday, May 13, 2011, 12:30 [IST]
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