Security and Exchange Board of India (SEBI) today submitted its draft charges and put forth their argument for framing of charges against Sahara Group's two companies and it's chief along with several other directors and promoters.
Senior advocate Poornima Advani representing the regulator told the court that the accused were responsible for the conduct of business of the company and issued Optionally Fully Convertible Debentures (OFCD) to the public in the garb of private placement without stating correct facts in the prospectus, making mis-statements in the prospectus and thereby fraudulently induced large number of persons to invest their money in OFCD issued by the company.
"Roy and others issued OFCD to the public without approval of red herring prospectus from SEBI and without listing such OFCDs on the stock exchange, " said Advani, adding that the "issued OFCDs to the public without executing debenture trust deed, without appointment of the debenture trustees and without creating security reserve for debenture redemption."
According to the prosecution, the accused also made false statement in the prospectus issued by the company and issued OFCD to public without complying with the SEBI guidelines.
According to SEBI documents, the accused even failed to provide information sought by Sebi through its summons dated 30.08.2010 and 23.09.2010.
The case pertains to 2008 when two real estate subsidiaries of Sahara Group told investors that they would get high returns for investing in land procured by the company. However, the money was never returned and Supreme Court has ordered Sahara group to sell Aamby Valley near Pune to raise the money.
In the meantime, Subrata Roy was present in court along with the doctor who had given him a medical certificate based on which his lawyers had sought exemption from appearance in court last month.
While the court rejected the exemption application, it had also called for police records of his movements. Advani told the court that at the time when doctor was said to have examined him, Sahara chief was travelling from Mahipalpur in Delhi to Gurgaon.
She also pointed out that the medicines given to Roy were only for acidity and paracetamol so "even if he was suffering from an upset stomach, he was not in a critical condition where saline was being given to him. So he could have definitely come to court," said Advani.
However, Roy's lawyer Abad Ponda assured the court that his client would be present during every hearing and thus requested the court to let go of the issue.
Roy and others also filed an application for discharge from the court which will now be heard on 28th June.
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