The Supreme Court has ordered Sahara India Real Estate Corporation Ltd and the Sahara Housing Investment Corporation Ltd to refund over 174 billion rupees (over $3bn), which the company collected illegally. The sum was collected from 2.2 million small investors through optional fully convertible debentures (OFCDs).
The companies should refund the amounts collected after issue of Red Herring Prospectus (RHPs) in March 2008 and October 2009 along with 15 per cent interest to the Securities and Exchange Board of India (SEBI) within 3 months.Sahara Group, under billionaire tycoon Subrata Roy, owns Grosvenor House Hotel in London and the Plaza Hotel in New York. According to the court, the group had “no right to collect” these funds from investors and that by doing so had "exploited" small depositors "in the lower strata of society."The SEBI has been authorised to seize the group's assets should the company fail to comply with the order. The group’s plans for expansion are likely to be affected by the court’s decision.The group has appealed to the decision.
