Regulations
Supreme Court gives SEBI free hand to seize properties of Sahara Group companies

The apex court also lambasted SEBI for not taking action against the companies—Sahara India Real Estate Corp and Sahara Housing Investment Corp—as per its 31 August 2012 order which had asked it to attach properties and freeze bank accounts of the companies

The Supreme Court on Wednesday gave market regulator Securities and Exchange Board of India (SEBI) free hand to freeze accounts and seize properties of its two companies for flouting court orders by not refunding Rs24,000 crore to investors.

 

The apex court also lambasted SEBI for not taking action against the companies—Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)—as per its 31 August 2012 order which had asked it to attach properties and freeze bank accounts of the companies.

 

Read: Sahara Case: What the Supreme Court hinted, by Dr Israni

 

 

The SC issued notice to the group to respond within four weeks why contempt action should not be initiated against the companies for not complying with its order.

 

Read: Supreme Court Order: Sahara unmasked, by Sucheta Dalal

 

“What steps are you taking? You are not taking any action. The judgement tells you what to do but you are doing it,” a bench of Justices KS Radhakrishnan and JS Khehar said.

 

SEBI submitted that it is taking action and issued notice to the companies and approached civil court in Bombay for freezing bank accounts.

 

Read: SEBI scores big with Sahara, by Sucheta Dalal

 

Not satisfied by its contention, the bench said that issuing notice is not enough and that SEBI has to follow its last year’s order.

 

“Why you gave notice and did not take action. You have to execute our order,” the bench said.

 

Read: Fallout of Sahara’s Defiance, by Sucheta Dalal

 

The apex court had on 31st August last year directed the two companies to refund around Rs24,000 crore to their investors within three months with 15% interest per annum for raising the amount from its investors in violation of rules and regulations.

 

In harsh observations against the companies, the court had said that such economic offences must be dealt with an “iron hand”.

 

Read: Supreme Court’s Sahara ruling: Salute to the judges, but a huge question mark before financial regulators, by Vinod Kothari

The Supreme Court on Wednesday gave market regulator Securities and Exchange Board of India (SEBI) free hand to freeze accounts and seize properties of its two companies for flouting court orders by not refunding Rs24,000 crore to investors.

 

The apex court also lambasted SEBI for not taking action against the companies—Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)—as per its 31 August 2012 order which had asked it to attach properties and freeze bank accounts of the companies.

 

Read: Sahara Case: What the Supreme Court hinted, by Dr Israni

 

 

The SC issued notice to the group to respond within four weeks why contempt action should not be initiated against the companies for not complying with its order.

 

Read: Supreme Court Order: Sahara unmasked, by Sucheta Dalal

 

“What steps are you taking? You are not taking any action. The judgement tells you what to do but you are doing it,” a bench of Justices KS Radhakrishnan and JS Khehar said.

 

SEBI submitted that it is taking action and issued notice to the companies and approached civil court in Bombay for freezing bank accounts.

 

Read: SEBI scores big with Sahara, by Sucheta Dalal

 

Not satisfied by its contention, the bench said that issuing notice is not enough and that SEBI has to follow its last year’s order.

 

“Why you gave notice and did not take action. You have to execute our order,” the bench said.

 

Read: Fallout of Sahara’s Defiance, by Sucheta Dalal

 

The apex court had on 31st August last year directed the two companies to refund around Rs24,000 crore to their investors within three months with 15% interest per annum for raising the amount from its investors in violation of rules and regulations.

 

In harsh observations against the companies, the court had said that such economic offences must be dealt with an “iron hand”.

 

Read: Supreme Court’s Sahara ruling: Salute to the judges, but a huge question mark before financial regulators, by Vinod Kothari

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COMMENTS

Ubaldo C DSouza

4 years ago

Will the SEBI do what they have been suggested and enabled to do or will it be a 'you scratch my back, I'll scratch yours'!

Vinay Joshi

4 years ago

Why SEBI is not in contempt of SC?

Why action should not be initiated against SEBI? SC August 31st order had explicitly asked SEBI to attach properties & freeze all a/cs?

Why SEBI failed?

The learned counsel for SEBI Mr.P Venugopal, has pleaded that there were 'procedural' difficulties - in attaching & freezing! What were they?

He further submitted that a bench headed by CJI had granted extension.

CJI had not heard it ex-parte! so why SEBI's then counsel had not objected? The said hearing was on December 5.[granting extension]

Now Sahara's counsel Mr.Ram Jethmalani cleverly pleaded on Jan, 6th that they had mentioned this application before another bench headed by CJI & is posted for hearing on Jan, 8th. The ploy didn't work.

As a matter of fact PIL should be filed - in no way contempt of SC or intended - to unearth 30mn investors by conducting forensic audit by an international forensic audit team.

Lets see how SEBI works or what the Hon'ble CJI bench decrees on 8th.

Regards,
















Vaibhav Dhoka

4 years ago

SEBI has become scapegoat for political masters.SC should proceed with contempt action against SAHARA group forthwith.SAHARA's are of opinion that they can dodge SC order with help of political masters.

SC orders Karnataka to release 2.44 TMC water to Tamil Nadu immediately

The Supreme Court bench, headed by Justice RM Lodha, passed its order after receiving the report of the expert committee that had visited the Tamil Nadu part in the delta region

The Supreme Court on Thursday ordered Karnataka on Thursday to release 2.44 TMC (thousand million cubic feet) of Cauvery river water to Tamil Nadu for irrigating its standing crops in the delta basin.

 

The Supreme Court bench, headed by Justice RM Lodha, passed its order after receiving the report of the expert committee that had visited the Tamil Nadu part in the delta region and recommended that 2.44 TMC water be released for the standing crop.

 

Ignoring Tamil Nadu’s objections, the court said: “According to you, whatever you say should be accepted as gospel truth and the order be passed accordingly.”

 

The court’s observation came in the wake of Tamil Nadu objecting to the expert committee report and saying that it was not based on objective grounds.

 

Appearing for Tamil Nadu earlier this week, senior counsel CS Vaidvanathan sought 9 TMC of water for the state’s standing crops spread over six lakh hectares of land.

 

He said one-third of the crops spread over three lakh hectares of land had perished due to drought and the remaining crop in six lakh hectares area needed to be irrigated twice to save it.

 

Senior counsel Fali Nariman, appearing for Karnataka, contended that 40% of standing crops had been harvested and the rest was about to be harvested. Thus, Tamil Nadu needed no water for irrigation.

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Opposite the police station

I had sent articles about Herbalife to two popular English dailies about a year ago cautioning the public at large to keep away from the MLM company, Herbalife. Unfortunately, my articles were never published. This company is operating out of a swanky building, opposite the Ashok Nagar Police Station, Bengaluru. This so-called MNC (Herbalife) has only a ‘Post Box address’ in Los Angeles (visit http://opportunity.herbalife.com/ ) Their agents at Bengaluru put out small ads in local newspapers tempting housewives and people who have taken voluntary retirement to ‘earn thousands sitting at home’. When one contacts them, one is never told what it is all about. Interested people are invited to attend a seminar. After reaching the venue, there is an entrance fee of Rs50. 

 
Then the lecture starts. The speaker—an immaculately dressed gentleman—says that Herbalife is a listed company on the New York Stock Exchange with turnover of several billion dollars. He is an engineer but he had left his previous job to devote full time to Herbalife. He claims that he earns over Rs2 lakh per month just selling the wonder products of Herbalife. 
 
The speaker takes out a carton which contains a few medicine bottles. He does not say what the medicines are, but calls 6-8 people from the audience (probably planted by him) and asks them to tell the audience about their experience after taking the medicine. Each one gives a three-minute lecture (timed by agents standing behind the audience). They narrate their experiences after taking the Herbalife medicine—a lady has been cured of some uterus problem; someone else has been cured of asthma; another person has lost weight; some others have gained weight; one man who had undergone angioplasty has not visited the doctor for the past six years; someone has been totally cured of blood pressure, diabetes and someone’s migraine has been cured. Some other people come to the stage and claim to have been sent to Malaysia, Hong Kong, etc, by Herbalife. They are earning several thousands selling this wonder product to others who are interested in wellness. Others (who are planted among the audience) keep clapping after every speaker finishes his speech. 
 
Then the speaker continues: “The wellness industry in India generates several thousand crores and it is very easy to sell this great product which can cure all diseases.” He urges the audience to buy this carton at 40% discount, which is available only for one day. He also appeals to the audience to become salesmen to market this product and be ‘proud working for the multinational company’. Then he comes to the point—“if you want to know more about this product and learn how to sell this product, buy this carton for Rs3,000 and attend the next lecture on so and so date.” 
 
On discrete enquires, I found that if anyone from the audience buys this box for Rs3,000, the ‘agent’ who has invited him for this seminar gets a cool Rs1,000 per box. (I think that they have increased the price now). So if you recruit three people, you recover your money. Every bakra just keeps this medicine carton in his house, hoping to recruit more bakras, since no one is foolish enough to buy an untested, unknown medicine for Rs3,000. None of them admits that they are a part of an MLM network. They just say they are sales guys working for Herbalife. There are several layers in this MLM chain with agents, distributors, supervisors, etc, each earning a portion of the commission, whenever a sale is made in their chain. 
NN Bala, Bengaluru, by email
 
Salt-related issues
This is with regard to “Facts about Salt” in Moneylife (10 January 2013) by Prof BM Hegde. He has answered some salt-related issues that have been worrying me for long. I entirely agree with him that ‘no two human beings are alike’ and ‘the one-size-fits-all approach does not work in medicine’.
 
The clarification on the salt-dependent hypertensive and salt-independent hypertensive, more particularly the statement, “There is a small group whose BP (blood pressure) levels actually come down with salt intake; for these people salt might be one of the treatments!” is exactly what I was looking for. This is essentially, because even if there are no curries on my lunch/ dinner plate I would prefer Indian pickles, more particularly South Kanara variety, heavy with salt as preservative. We are borderline hypertensives and my siblings have been constantly warning me to reduce my pickle intake, in vain. Now that I have ‘authoritative’ information from a person of Prof Hegde’s eminence, I am free to consume more to my heart’s content!
 
The statement, “Two preventive measures to postpone osteoporosis, especially in women, are to take as little salt as possible and exercise regularly. The latter conserves bone calcium. Taking calcium tablets orally sends out more calcium in urine (calcium-induced-calcium-loss),” is very revealing and a must-read for all women. 
 
Eagerly look forward to more of such enlightening writing from Prof Hegde!
Nagesh Kini, Mumbai, by email
 
Poor service
Through your publication, I would like to bring to notice the shabby treatment meted out by senior personnel of the post-office. I had issued a cheque for Rs4,900 on 24 December 2012, which was presented by my bank, Bank of India, to the GPO Poona. They returned the cheque to Bank of India on 26 December 2012 with a comment ‘insufficient funds’. 
 
On close scrutiny of the entry in the passbook of my GPO account, I observed that I had a clear balance of Rs5,210 on the date of presentation of the cheque. Further, they also levied a charge of Rs50 for return of cheque. However, there is no entry of debit or credit of Rs4,900.
 
When I brought this to the notice of the senior post master, GPO (after getting no response from his juniors), he said he would look into it. When I approached him again on 5 January 2013, he simply refused to listen to me and said that his stand of rejecting the cheque and levying a fine of Rs50 was justified. When I tried to explain to him that my Bank had levied a charge of Rs150 towards return of the cheque, he did not bother to listen at all. On the contrary, he made an allegation that, as a senior citizen, I should not create such a ‘nuisance’. He said that he was a public servant and his time was precious and he had more urgent work to do. He also made a sarcastic remark that if he had paid Rs50 to me from his own pocket, then perhaps I would not have raised the issue.
 
I was shocked to hear the senior post master, but he called his deputy and simply walked out of the cabin, with a comment that post-office rules are framed by the parliament and that there is no comparison with banks. It is such attitude of government servants that puts senior citizens to loss (monetary and physical).
 
If the balance amount had fallen below the statutory limit of Rs500, then he is entitled to deduct and charge the penalty of Rs50. However, the balance did not fall below the amount mentioned (Rs5,120); yet, the cheque was rejected as ‘insufficient funds’. I was charged by GPO as well as Bank of India.
Ravi Chhabra, Pune, by email
 
Alleviating misery
This is with regard to “Remembering Swami Vivekananda” by SD Israni. It is a very thought-provoking article. If we imbibe the teachings of Swamiji, in our day-to-day life, it will definitely help in alleviating misery.
Sameer Thekedar
 
Revive mutual funds
This is with regard to “Equity schemes suffer more outflows and a huge decline in folios” by Jason Monteiro. It is going to be extremely difficult to revive mutual fund (MF) industry. Most measures taken post-August 2009, including the entry-load ban, have proven counterproductive. These ‘reforms’ have hurt more than they have helped the cause of the retail investors as well as the mutual fund industry. The effect of the most recent MF reforms must be reviewed after giving it a fair trial over a reasonable period. If some or all of these reforms are found useless, they should be scrapped without delay. 
Nilesh Kamerkar
 
No dead-end
This is with regard to “Social Media Restraints” by Sucheta Dalal. Not to worry. Our laws will be issue-specific or person-specific. One advocate, who was asked about the source of a huge fee he received for representing a criminal, told the media that there was a provision in the law not to divulge such information! There will be no dead-end; there will always be a diversion.
MG Warrier
 
Valuable work
This is with regard to “American financial watchdog launches investigation into Herbalife.” Thank you for exposing this scourge. The Herbalife/ Ackman battle is a significant one; anyone who wants to know more can simply go to http://factsaboutherbalife.com. Readers must compare the case of Herbalife with other MLM schemes. Moneylife has done well to uncover QNet, another fraudulent pyramid scheme. I must commend Moneylife Foundation for the valuable work it does.
Sach

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