Rejecting the appeals of Sahara Group companies, the Securities Appellate Tribunal (SAT) on Tuesday asked them to refund the money raised through Optionally Fully Convertible Debentures (OFCD) to investors within six weeks.
"...both the appeals are dismissed...The appellants in both the appeals shall now repay within six weeks from today the amount collected from investors on the terms as set out by the whole time members (of Sebi) in the impugned order," SAT said in its order.
While dismissing the appeal filed by Sahara Group companies against the Sebi order, it held that the market regulator has jurisdiction over such fund raising schemes.
"We may mention that in view of our findings that OFCDs issued by the company are securities and that the issue was a public issue requiring mandatory listing and that Sebi has the jurisdiction under the Sebi Act to deal with all kinds of securities and companies, whether listed or not...", the order said.
It could not be immediately ascertained how much money the Sahara companies would have to refund to investors who had parked their funds as OFCDs.
SAT has given the two companies, Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation Ltd) and the Sahara Housing Investment Corporation six weeks to return the money.
The Securities and Exchange Board of India (Sebi) had in June asked the two Sahara group entities to return money collected from millions of investors through a financial instrument OFCD citing violation of regulatory norms.