Sahara : Statement of Advocate Gautam Awasthi on 28th November 2014

The Sahara had filed applications seeking permission of the Hon’ble Supreme Court for taking over of the loan of Bank of China relating to three foreign properties. The Sahara will also be raising a loan of US$650 million on the foreign properties for being utilized for the payment in SEBI-Sahara Refund Account in compliance of the order dated 26.3.2014.

The court, on the insistence of SEBI, has asked Sahara to show the ESCROW agreement with respect to the junior loan of US$650million and once SEBI gives a no objection and the money is transferred in the ESCROW account, the Hon’ble Court will permit the taking over of the loan from Bank of China and raising of the junior loan.

The Hon’ble Supreme Court was also shown the agreements of sale with respect to domestic properties. The SEBI, however, has sought time to submit its response regarding the proposed sale of domestic properties at Chomma, Jodhpur, Vasai and Pune.

The Sahara have demonstrated that in addition to Rs 3,117 crore already deposited, the balance amount for compliance of the order dated 26.3.2014 have been arranged and once necessary permissions are granted by the court, the money will reach SEBI in a phased manner. The Hon’ble Supreme Court has now listed the matter for Tuesday, 2^nd December 2014.

Gautam Awasthi

Advocate

Ref: http://www.newspatrolling.com/statement-of-advocate-gautam-awasthi-on-28th-november-2014/

Ex-RBI official, Sebi men and ROC officer under CBI scanner

The Central Bureau of Investigation (CBI) has zeroed in on at least four senior officials, including two of market regulator Sebi and a retired manager of the Reserve Bank of India, for their alleged role in laundering huge amounts of money in the multi-crore Saradha financial scam.

The agency, which has already made two arrests in connection with the ponzi scheme in West Bengal — East Bengal Club executive member Debabrata Sarkar on Wednesday and businessman Sandhir Agarwal on Saturday — had put the said officials, all from regulatory organisations, under the scanner. The investigation against them is now at an advanced stage.

Significantly, the Enforcement Directorate (ED), which is probing into the money laundering aspect of the scam, had found several “serious irregularities” in the functioning of these officials.

The ED had also interrogated these four along with several others. They include a retired RBI manager, a top official in the Registrar of Companies, Kolkata, and two Sebi officials. They are accused of “lapses”, and investigators revealed that they “compromised on their official responsibility” and had allegedly accepted huge “bribes” to look the other way. Sources in the CBI said the agency has collected proof about their involvement.

Earlier CBI sleuths during raids across several locations across the country, had seized documents that showed how certain officials tried to cover up the business of Saradha Group chief Sudipta Sen.

For instance, in 2009, 140 companies of Saradha Group were registered with the ROC, Kolkata in a span of four days. Significantly, more than 50 of these 140 companies were registered on a Saturday, revealed a senior official of Union finance ministry. Officially, the ROC is closed on Saturday.

“RBI and Sebi are equally responsible (for the scam). While Sebi officers were sitting on the Saradha files, RBI did not inspect the company even though it has the power to do so. The vigilance commission in Sebi has already conducted an internal inquiry into the malpractices of some of its officers. A report has been submitted to both the ED and the CBI,” the official said.

He added that the ROC, Kolkata also played a major role in the scam. “Every year, ROC used to receive the balance sheets of the company. They should have identified the irregularities… Most of the balance sheets of the company are now found to be fake and mostly with manipulated data,” he said.

- See more at: http://indianexpress.com/article/business/business-others/ex-rbi-official-sebi-men-and-roc-officer-under-cbi-scanner-in-saradha-scam/#sthash.tztFxdCG.dpuf

Is Really Big Companies Like Sahara, DLF are Culprit

Everyone loves it when a regulator acts tough against large corporations. So when the Securities and Exchange Board of India (Sebi) banned DLF Ltd and six senior officials, including its chairman and founder, it expectedly won plaudits. Shekhar Gupta, a senior journalist, tweeted, “Sahara, now DLF, Sebi stature grows…”

However, Sebi’s conduct in the DLF case has been vastly different compared with its handling of Sahara. It took more than seven years to pass its judgement. During this time, the original complainant against DLF, K.K. Sinha, was forced to take Sebi to court alleging “deliberate inaction”. Besides, the Delhi high court castigated the regulator on more than one occasion for dragging its feet on the case.

 And while many have been enamoured by the ‘housewives’ plot allegedly used by DLF to hide its association with some subsidiaries, as shown in Sebi’s order, the truth is that Sinha informed the Delhi high court about this way back in September 2008.

 For some perspective, Sinha first sent a complaint directly to Sebi, alleging that DLF hadn’t disclosed an ongoing litigation between him and a DLF subsidiary in its initial public offering (IPO) prospectus. Sebi’s order suggests that this complaint was forwarded to DLF for its response. The developer, obviously, denied the allegations, saying that the said company wasn’t a subsidiary.

 Because of Sebi’s inaction at the time, Sinha filed a writ petition before the Delhi high court in 2007. Some of Sebi’s arguments during the hearing of this case are worth noting. Sebi objected that since the petitioner was not an investor in the securities market, he had no locus standi to file the petition. It also contended that since the subsidiary company in question was an unlisted company, it wasn’t amenable to the Sebi regulations and guidelines. Note that in the Sahara case, Sebi took the exact opposite stand, which is that it acted against an unlisted company.

Sebi didn’t exactly cover itself with glory with those statements, and the high court judge observed, “In the instant case, as the facts reveal, Sebi was inexplicably slow in reacting to the petitioner’s complaints. Its subsequent failure to initiate further steps to investigate the transaction in question was also not consistent with its statutory obligation.” In his judgement in April 2010, the judge directed Sebi to undertake an investigation into the complaints made by Sinha.

Although it dithered on the DLF case, Sebi has done well to bring closure to the case (although, of course, it will now be fought at the Securities Appellate Tribunal and perhaps, even the Supreme Court). But it should go further and look at the role of investment bankers and other related issues. To stop at only Sinha’s complaint will be quite an inadequate response, considering all that its investigations have unearthed thus far.

For more info : http://www.livemint.com/Money/HEzLkPp0o1LgcEaUNLlHML/Sebi-Reluctant-hero-in-the-DLF-case.html