SEBI Challenges SAT Relief in ₹14,106 Crore Sahara OFCD Case before Supreme Court

Moneylife Digital Team 15 June 2026

Investor Interest

The Securities and Exchange Board of India (SEBI) has approached the Supreme Court challenging a part of a securities appellate tribunal (SAT) order that granted relief to four managers and the company secretary of Sahara India Commercial Corporation Ltd (SICCL) in a long-running case relating to the issuance of optionally fully convertible debentures (OFCDs).

According to media reports, a vacation bench comprising chief justice Surya Kant and Justice V Mohana is scheduled to hear SEBI's plea on 18 June 2026.

The market regulator's challenge is limited to the portion of the SAT ruling that absolved the four managers and the company secretary of liability. The tribunal had earlier upheld SEBI's regulatory action against SICCL and its directors in connection with what the regulator described as an illegal public issuance of OFCDs.

In its 9 March 2026 order, a three-member SAT bench dismissed appeals filed by SICCL and its directors, affirming SEBI's findings that the debentures issued by the company between 1998 and 2008 constituted a public offer and therefore fell within the regulator's jurisdiction.

The tribunal observed that SICCL had mobilised about ₹14,106 crore from nearly 19.8mn (million) investors through the OFCDs during the period under review. Given the scale of fundraising and the number of investors involved, SAT held that the exercise could not be regarded as a private placement, as the company claimed.

The ruling marked a significant affirmation of SEBI's position that the fundraising activity was subject to securities market regulations.

However, while rejecting the appeals of the company and its directors, the tribunal provided relief to four managers and the company secretary who had separately challenged the regulatory action.

SAT held that the officials, acting as employees of the company, could not be held personally liable for the company's actions. The tribunal also noted that the company secretary had signed the prospectus under powers of attorney granted by the directors and was acting as an agent of the company's principal decision-makers.

According to the tribunal, responsibility for acts carried out under such authority rested with the directors, who remained accountable as principals for actions undertaken by their agent.

SEBI has now questioned this aspect of the ruling before the apex court, seeking a review of the relief granted to the officials.

The matter stems from an October 2018 order issued by SEBI against SICCL. In that order, the regulator directed the company to refund the money raised through the OFCDs, provide details of its inventory and assets, and barred certain officials from accessing the securities market.

The OFCD issue has been one of the most prominent cases involving Sahara group entities and concerns allegations of large-scale fundraising from millions of investors through instruments that regulators maintained amounted to public securities offerings.

The Supreme Court's consideration of SEBI's appeal is expected to focus on whether the managers and company secretary can be held accountable for their roles in the issuance process despite SAT's finding that they acted as employees carrying out directions from the company's directors.

The outcome could have broader implications for determining the extent of liability of company executives and compliance officials in cases involving securities law violations, corporate governance failures and public fundraising activities.

You can also read our detailed coverage of the Sahara issue here....

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