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Informist, Thursday, Jun. 18, 2026

 

NEW DELHI – The Supreme Court Thursday issued notices to four managers and a company secretary of Sahara India Commercial Corp. Ltd. on a plea by the Securities and Exchange Board of India against the Securities Appellate Tribunal's March order in the INR 141.06-billion optionally fully convertible debenture case. The market regulator has challenged the appellate tribunal's order that gave relief to the managers and company secretary from paying back the loss suffered by subscribers to these debentures, which were issued by Sahara India Commercial Corp., with interest at 15% per annum. The apex court has tagged the market regulator's plea with similar cases arising out of the appellate tribunal order.

 

The case has its genesis in SEBI finding out that Sahara India Commercial had offered optionally fully convertible debentures from 1998 to 2009, raising at least INR 141.06 billion from at least 19.80 million allottees. Prima facie, there appeared to be a violation of the Securities and Exchange Board of India Act, 1992, Companies Act, 1956, SEBI (Disclosure and Investor Protection Guidelines) 2000, SEBI(Issue of Capital and Disclosure Requirements) 2018, and Merchant Banker Regulations, 1992.

 

In 2015, the market regulator had issued notices to Sahara India Commercial, its directors, promoters, and managers, alleging unlawful offer and raising of INR 141.06 billion through optionally fully convertible debentures during 1998 to 2009. It said that the company and others had fraudulently induced persons to invest money and did not make an application to the recognised stock exchanges for permission to offer debentures as it was a public issue. 

 

The market regulator had asked the company, its directors, managers and chartered accountant to refund the amount to its subscribers. The appellate tribunal said that optionally fully convertible debentures issued by Sahara India constituted a public offer, bringing them within SEBI's regulatory jurisdiction. Such a large-scale mobilisation of funds from such a huge number of investors could not be treated as a private placement, as claimed by Sahara India, the appellate tribunal said.

 

The appellate tribunal upheld the market regulator's order against Sahara India and its directors. However, it set aside SEBI's orders against the company's managers and company secretary. The appellate tribunal said that the managers were merely paid employees and could not be held liable for the acts and omissions of the company and its directors. Challenging the orders on managers and chartered accountant, the market regulator moved the apex court.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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