HC stays SEBI order banning Sahara grp cos from raising funds

LUCKNOW: The Allahabad High Court today stayed an order of SEBI restraining the Sahara India Real Estate Corporation from accessing public funds.

The Lucknow bench of the high court comprising Justice Devi Prasad Singh and Justice Virendra Kumar Dixit passed this order on a writ petition filed by Sahara India Real Estate Corporation Ltd.

The court, while admitting the writ petition of Sahara India for peremptory hearing, directed the Registrar of companies (ROC)/central government to proceed with the matter (rpt) matter at their end, investigate in the interest of shareholders and submit a status report by the next date of listing, January 12 next.

A SEBI official declined comments. The court also said in its order that "the petitioners shall provide all necessary required information to the ROC in terms of notice dated September 21 and October 14 last expeditiously say with in three weeks".

In case registrar arrives to the conclusion that it is a case of public company then, it shall proceed in accordance to law and also inform the SEBI, the court said.

In its petition, the Sahara group firm challenged the order of SEBI restraining two entities and promoters, including Chairman Subrata Roy, from accessing market for non-disclosure of information.

The Sahara company has argued that only the central government may pass such an order and not the Securities and Exchange Board of India (SEBI).

Apart from banning Sahara India Real Estate Corporation (SIRECA), Sahara Housing Investment Corporation (SHICL) and their promoters -- including Roy -- from raising money from the public, SEBI had said there was a need for lifting the veil on corporate fund raising.

It also sent a recommendation to the government for taking appropriate action under the Companies Act.