Sebi's order could freeze Sahara's India-wide realty projects

The action by the Securities and Exchange Board of India (Sebi) against the Sahara group of companies brings a large number of real estate projects under the freeze.

The Sebi order is based on an affidavit filed on behalf of Sahara India Real Estate Corporation and Sahara Housing Investment Corporation to the Supreme Court where they had given details of the investment made from the monies generated through debentures. Other than freezing the Aamby Valley development project spread over 707 acres, it also brings in its sweep 186 acres in Gurgaon.

The order by Sebi's whole-time member Prashant Saran says that the development rights are held by various Sahara group entities and purchased for a consideration of Rs 1,436 crore. It also attaches between 90 to 95 per cent stake in a swathe of 64 projects in 64 towns across India, mostly under the name Sahara City Homes.

The development rights in these projects were purchased by various Sahara companies for Rs 1,105 crore the order points out.

The Sebi order seeks attachment of all other movable and immoveable properties owned or held by the two companies with immediate effect. It has asked them not to 'alienate, dispose or in any manner encumber the same.'

The Sahara group has contested the regulator's order. Sahara notes that the total liability is not likely to exceed Rs 5,120 crore, which amount has already been deposited with Sebi. As regards the instalments to be deposited with Sebi as per the order of the Hon'ble Supreme Court, Sahara has filed interim application before the.... court interalia praying that Sahara be permitted to furnish security through a credible financial institution instead and in place of the payment of the balance instalments, since Sahara has already redeemed significant number of (debenture holders) and any further payments to Sebi would amount to double payment. The said interim application is pending and is likely to come up next week.

The apex court in August last year had asked Sahara group firms to refund the money with 15 per cent interest and had asked Sebi to facilitate the refund. However, the group in December 2012 was allowed to pay the money in three instalments, including an immediate payment of Rs 5,120 crore.