The Allahabad High Court has vacated the stay in the Sahara group case necessitating the company to share full details of investors participating in its fund raising exercise with the market regulator.
Two entities of Sahara Group - Sahara India Real Estate Corporation Limited and Sahara Housing Investment Corporation Limited - were raising money from investors through Optionally Fully Convertible Debentures (OFCDs).
Market regulator Sebi had asked the Sahara group to share investors' details, a direction which was initially opposed by Sahara.
Sahara had filed petition in the Allahabad High Court in December last year and got stay on Sebi's directive. Later in January Sebi moved the Supreme Court which allowed the regulator "to call for any information which it deems fit including the names of the investors who have invested in OFCDs..."
Sebi, on April 5 this year, filed an application before the High Court for the vacation of the interim order and dismissal of the writ petition on the ground that "the said interim order is not complied with till date and the requisite information as asked for by the Sebi has not been provided".
"We do not find any ground to continue with the interim order, which is hereby vacated for the own conduct of petitioners (Sahara India Real Estate Corporation Limited and others) and for which they have to thank their own stars", said the order of the Lucknow bench of Allahabad High Court which was posted on the website of Sebi.
Taking "serious note" of the developments in the Sahara case, the High Court said, "The petitioners were supposed to cooperate in the inquiry (by Sebi)...but the petitioners appear to have thought otherwise. The Court's order cannot be allowed to be violated or circumvented by any means".
Although Sahara Group in compliance with the Supreme Court order of January 4 supplied information about OFCD investors to Sebi, they were only names and amount invested without any address and other particulars.
"The plea of the petitioners that the order of the Supreme Court did not require the petitioners to furnish the address of the investors and only names were required to furnish also cannot be accepted", the High Court said.
"In fact giving the names of certain persons with the amount invested by them with no details of address and other particulars was only a camouflage. The information furnished by the petitioners cannot be said to be any information in the eyes of law, with the directives issued by the court", it added.