sahara

Sahara-SEBI Case: SC Declines Sahara Plea to Issue Notice to Govt on OFCD Issue

by Paul Joseph July 11, 2011

The Supreme Court has declined the Sahara Group’s plea to issue a notice to the government in connection to a dispute with market regulator Sebi, which had directed the firm to return funds raised from investors under an OFCD scheme along with 15 per cent interest. “We do not want Union of India (government) to come at this stage. Let them (Sebi) come and clarify. We have our own query on it,” said the bench headed by the chief justice S H Kapadia. During the proceedings on Friday, senior advocate Fali S Nariman, appearing for the Sahara group, said that Sahara was not a listed company and only the government has jurisdiction over it and not market regulator Sebi. “We (Sahara) are not a listed company and the government (Ministry of Corporate Affairs) has jurisdiction over us. If there is any listed company, then Sebi has jurisdiction,” he said, asking the bench to issue a notice to the government seeking a clarification of its stance. Narimnan said that despite the matter was pending in the court, Sebi issued fresh cause notice to the group and passed the order. On it, the bench said,” We have asked the Sebi to explain it. We wanted to know that from where you got this (concept of) OFCD.” The Supreme Court further said that it had asked Sebi as “We wanted investors to be protected.” The bench later adjourned the matter for a week on the request made by Sebi’s counsel P Venugopal. Sebi submitted that Sahara group has filed some documents before it and the regulator wanted to go through it. In November, Sebi had indicated that two Sahara Group firms — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — were raising funds from the public through an optionally fully convertible debentures (OFCD) scheme without conforming to prudent disclosure and other investor protection norms. Subsequently, Sahara Group had contested Sebi’s authority to look into the issue in the Supreme Court, asserting that it was a privately held company and not listed and therefore, was under the jurisdiction of the Ministry of Corporate Affairs. Earlier, on June 27, a vacation bench of the apex court, comprising justices P Sathasivam and A K Patnaik had declined to hear the plea of Sahara India Real Estate Corp and asked to list it before the Chief Justice which has been hearing the case. Following the orders of the Supreme Court, the Security and Exchange Board of India had on June 23 passed an order and directed the two Sahara group firms — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — to refund the money raised by them in OFCD citing violation of regulatory norms.

Tagged as: exchange-board, government, india, investment, jurisdiction, kapadia-during, money, real estate india, sahara, sahara-group, supreme-court

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Sahara Moves to Supreme Court against Sebi’s Refund Order

by Paul Joseph June 28, 2011 Uncategorized

A Sahara Group firm has moved the Supreme Court against market regulator Sebi’s order asking it to return money collected from investors through a scheme along with 15 per cent interest. A vacation bench headed by Justice P Sathasivam directed the matter to be listed for hearing on July 4, the first day after the vacation. Sahara India has criticised market regulator’s move to make its order public when the matter is pending before the Supreme Court. Sebi on June 23 had directed two Sahara group companies — Sahara India Real Estate Corp (SIRECL) and Sahara Housing Investment Corp (SHICL) — to refund the money raised from investors through optionally fully convertible debentures (OFCDs) with an annual interest of 15 per cent from the date of receipt of money. The Sahara group firm sought directions to Sebi to remove the order from its website and restrain the market regulator and its officials from publicising the order which it has challenged. The Sahara’s counsel argued that the company wants Sebi to expunge the parts of the order directing it to return money with interest to the investors as it has created a panic among the investors. “The 99-page order (by Sebi) has created panic among the investors. They (Sebi) are holding press conferences and giving out releases about the order,” he said.

Tagged as: delhi, estate-corp, gurgaon, matter, money, noida, real estate developers, real estate india, sahara, sahara-group, sahara-housing, supreme, supreme-court, vacation

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SEBI Orders Sahara Group to Return Money Raised from Investor

by Paul Joseph June 24, 2011

India’s market regulator Thursday ordered two companies of the Sahara Group to return the money raised from investors from the issuance of six optionally fully convertible debentures (OFCDs) for failure to adhere to local laws. The Securities and Exchange Board of India, or SEBI, said it ordered Sahara Commodity Services Corp. Ltd., earlier known as Sahara India Real Estate Corp. Ltd., and Sahara Housing Investment Corp. Ltd. to return the money as the two companies had “mobilized huge public money in the guise of private placements” without adhering to the regulatory framework. The regulator also ordered the two companies to pay interest at the rate of 15% per annum from the time of the receipt of the money from investors till disbursement. OFCDs are bonds issued to investors which gives them the option to fully convert the debt repayable by the company into equity shares. The Sahara Group companies had argued before Indian courts that the issuance of the bonds were private and hence out of the purview of the market regulator. They also argued that the bonds issued by the companies were neither shares nor debentures in its strict sense. “The two companies have issued OFCDs to 6.6 million investors,” SEBI said to reason that the capital raising exercise was not private in nature. Also, OFCDs do come under the definition of bonds which are under the purview of the regulator, SEBI added. SEBI also barred the two companies from raising funds from the securities market till they repay investors. Also, the regulator barred the billionaire chairman of the Sahara Group–Subrata Roy Sahara and other directors of the companies from associating with any listed firm or a company which intends to raise money from the public till investors are repaid. The order will be in effect subject to the orders of the Supreme Court of India, the market regulator said on its web site Thursday. A Sahara Group spokesman did not immediately respond to call or an email seeking a comment.

Tagged as: billionaire, bonds, delhi, investment, issuance, kolkata, market, money, real estate developers, regulator, sahara, sahara-housing, supreme-court

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MCA to keep itself Away from Sebi-Sahara Dispute

by Paul Joseph June 20, 2011

The Ministry of Corporate Affairs (MCA) washed off its hands from the ongoing dispute between Sebi and Sahara Group companies, which has been restrained by the market regulator from mobilising funds from the public. In a statement, the MCA has clarified that Sahara Prime City intended to go for an IPO and had filed information about its group companies to Sebi in its Draft Red Herring Prospectus. Further, Sebi upon noticing inadequacy in material disclosures had asked information about some Sahara Group companies as per its disclosure requirements. However, the information was not furnished by November 11, 2010, and Sebi passed an interim order issuing show cause to two Sahara Group companies — SIRECL and SHICL — and restraining them from mobilising funds from the public. “This order has been challenged by the said companies and the case is now sub judice before the Hon’ble High Court of Allahabad, Lucknow Bench. As this is a matter between the Sahara Group companies and Sebi, the MCA cannot intervene in the matter,” the MCA said. The MCA added that in order to check misuse of private placement provisions under the Companies Act, 1956, issued a circular dated 22 November, 2010 mandating its field offices to carefully scrutinise offer documents filed by Unlisted Public Companies proposing to raise money through the private placement route. Besides, it is working on to substitute Unlisted Public Companies ( Preferential Allotment) Rules, 2003 by replacing it with Unlisted Public Companies (Preferential Allotment) Rules, 2011, which would require more disclosures and keeping the securities in demat form. Also, it said checks and balances, coupled with stringent penalty provisions have been built into the Companies Bill to prevent misuse.

Tagged as: before-the-hon, delhi, group-companies, gurgaon, offer-documents, public, real estate, sahara, sahara-group, securities

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Supreme Court Criticises Sahara Real Estate’s Modus Operandi; Allows SEBI to Probe Sahara Group’s Fund Raising Instruments

by Paul Joseph May 13, 2011 Uncategorized

Apex court criticizes the way Sahara operates, compares it with the modus operandi of the late Harshad Mehta. The Securities and Exchange Board of India (Sebi) can examine financial instruments used by two companies of the Sahara Group to raise money from the public after India’s top court dismissed its petitions on Thursday. Sahara India Real Estate Corp. Ltd and Sahara Housing Investment Corp. Ltd are fighting the capital markets regulator on the issue of optionally fully convertible debentures (OFCDs) being used to collect funds from investors. Thursday’s court order means that Sebi can determine the nature of OFCDs and whether Sahara was using them in a legitimate manner to bring in investor money. Although the court restricted itself to directing Sebi to investigate the issue, it criticized Sahara’s method of operating, likening it to that of the late Harshad Mehta, the broker at the centre of the securities scam of 1992.

Tagged as: broker, chennai, from-the-public, real estate developers, real estate india, sahara, sahara-group, sahara-housing, sahara-india

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Sahara Real Estate in trouble Over Use of Third Party Account

by Paul Joseph May 12, 2011

A Sahara group company, which has raised Rs 4,843 crore by issuing optionally fully convertible debentures (OFCDs), is not using its own bank account to handle this money. In March, the Registrar of Companies (RoC), Uttar Pradesh and Uttarakhand, based in Kanpur, sent a notice to Sahara India Real Estate Corp for using a third party’s bank accounts to receive funds from investors. The debentures were issued by Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation. The cheques were received in the name of “Sahara India”. According to the complainant, the investors put money in Nirman Bonds and real estate bonds. As instructed by the agents, they issued cheques in favour of “M/s Sahara India”. When they got the receipts, they realised these had been issued in the name of a third party. “The cheque was taken in the name of Sahara India. However, the receipts have been issued by a third company. Is this action approved by the Registrar of Companies?,” the investor asked in his complaint. Business Standard sent several mails and reminders to the company over the last couple of weeks. However, it responded late tonight, seeking another 48 hours to reply. However, in a written response dated April 19, 2011, Sahara India Real Estate Corp told the registrar that “Sahara India Real Estate Corporation, through an agreement with M/s Sahara India, has agreed to utilise infrastructure, including bank accounts and other services, of the firm for private placement of optionally fully convertible debentures.” The company said this did not attract action under Section 297 of Companies Act, 1956, as no director of the company was an interested party as a partner in Sahara India. However, neither the application forms nor the receipts mention this agreement, keeping investors in the dark. According to legal experts, this is prima facie a wrong practice and may lead to misuse of funds by the third party, impacting the interests of investors. “Technically, it is wrong. How can I use somebody else’s bank account?” said Kanu Doshi, a senior chartered accountant and dean of Welingkar Institute of Management, adding he did not want to comment further as the matter was sub judice. The case is scheduled to come up on Thursday. The Supreme Court has asked Sahara to submit a list of agents and the formats of application forms it has been using to raise money through debentures. According to Sahara India Real Estate’s submission, the company has 6.6 million investors. Sebi guidelines clearly specify that any issue of equity or debt to more than 49 people is governed by the Issue of Capital and Disclosure Requirements norms. Sebi mandates safeguards like appointment of dedicated bankers to handle public issues. Also, subscription funds are to be held in an escrow account during the period of allotment of shares before being transferred to the company’s account. Sebi has issued an order banning Sahara from raising money through OFCDs for violating public issue norms.

Tagged as: application, companies, delhi, estate, investment, mumbai, real estate developers, real estate trends, sahara, sahara-india, supreme-court

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Dubai Properties 60 % lesser than Mumbai Real Estate

by Paul Joseph April 7, 2011 Uncategorized

An increasing number of investors from India are confirming interest in Dubai as they appear to capitalize on 60 % savings / square foot in the Dubai real estate market, a Dubai-based property company has remarked. DAMAC Properties announced as well as the price difference, Dubai’s Property Market is fetching more and more attractive to foreign investors owing to the implementation of a propel of fresh regulations, for example the new Strata law, which supports home landlords. “As these latest tougher and more strict regulations take hold, India Property investors are seeming to take advantage of the surfeit of investment opportunities that survive surrounded by the emirate’s property market,” it supposed in a statement. At an average price / square foot of USD 264 in Dubai, consistent with Colliers International, real estate is at the moment 60 % less expensive than in central Mumbai Real Estate , where the price /square foot is USD 664 in line with Jones Lang LaSalle. “Not only are we observing a flow of interest from potential Investors from India but also from other budding markets for instance sub Sahara Africa and China who are in search of quality assets, at bloodthirsty prices.” in keeping with McLoughlin, even if assurance was shaken subsequent the international slowdown, the introduction of fresh regulations in Dubai offers property purchasers more safety over their investments. DAMAC Properties has also hail the return of liquidity into the mortgage bazaar, which it cites as an additional major thing in the revival of the emirate’s property area.

Tagged as: emirate, india property, mumbai real estate, price, property-market, real estate market, sahara

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Dubai Property Market attracts Indian Investors

by Paul Joseph April 7, 2011 Uncategorized

A growing number of investors from India are showing interest in Dubai as they look to capitalise on 60 per cent savings per square foot in the Dubai property market, a Dubai-based real estate company has said. DAMAC Properties said in addition to the price disparity, Dubai’s property market is becoming increasingly attractive to foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners. “As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the emirate’s real estate market,” it said in a statement. At an average price per square foot of USD 264 in Dubai, according to Colliers International, property is now 60 per cent less expensive than in central Mumbai , where the price per square foot is USD 664 according to Jones Lang LaSalle . DAMAC Properties Senior Vice-President Niall McLoughlin said: “At DAMAC Properties, we have seen a marked rise in interest across our Dubai portfolio from Indian investors; in January 2011 we had double-digit growth in enquiries on the same period last year. “Not only are we seeing a surge of interest from potential Investors from India but also from other emerging markets such as sub Sahara Africa and China who are looking for quality assets, at competitive prices.” According to McLoughlin, even though confidence was shaken following the global slowdown, the introduction of new regulations in Dubai gives property buyers more security over their investments. DAMAC Properties has also welcomed the return of liquidity into the mortgage market, which it cites as another major factor in the revival of the emirate’s real estate sector.

Tagged as: banking and finance, china, dubai, implementation, india, indian, introduction, new-regulations, property prices, property-market, real estate, real estate developers, real estate trends, sahara

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RE/MAX Announces Opening of its 100th Office in India

by Paul Joseph October 1, 2010

The world leader in real estate brokerage RE/MAX today announced the opening of its 100th office in India. RE/MAX has been able to achieve this landmark in a record time of less than year of operations. With the huge footprint the organization is all geared up to meet the real estate needs of the huge and growing retail segment. With organized entrepreneurship moving from Metros to Tier 2 & Tier 3 cities, the company’s rapidly growing network of offices has emerged as a preferred real estate solution providing network among various domestic brands and their franchisees. RE/MAX India has witnessed phenomenal growth across the length and breadth of the country and is growing every passing day. On this occasion Mr Sam Chopra, Director, RE/MAX India said – “As a real estate franchising company our biggest strength is the Network Value proposition which facilitates more choice for the customer and reduces the turnaround time – as a result, we are able to position ourselves as a preferred marketing partner for many National & International Developers. In turn, any Franchise Partner who joins us enjoys unmatched inventory, nationwide network, world class training, most advanced real estate technology & the power of a global brand.” The company is also continuously tying up with many Regional and National Developers including DLF, Omaxe, Earth Infra, Vigneshwara, Marg Properties, Unitech, Marg, Sahara Developers, Radhey Builders, City Square, Alliance Group and many more. Most of these tie-ups are Exclusive Mandates where a part of the Project is exclusively marketed by RE/MAX Network of Offices. Mr. Chopra adds – One of our key USPs is the micro-enterprise model which helps us expand reach and penetrate more effectively in the real estate brokerage market which is universally local in nature. Our presence also helps us position ourselves to the level of Underwriters in terms of the deals / offering in the primary property market because of the tremendous intra-network referral opportunities. In just about an year we have been able to open about 5-10 offices in almost all the major cities including Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Ahmedabad, Chandigarh, Pune, Jaipur, Nagpur, Amritsar, Bhopal, Vadodara, Coimbatore, Vijaywada etc and that has helped us emerge as a Preferred Marketing Partner for many leading developers and we would continue to be as the network keeps growing. The Delhi Headquartered Master Franchise has won the prestigious Master Franchisor of the Year in Real Estate at Franchise Plus awards 2010. Early this month, RE/MAX India was also awarded as the Startup of the Year at Franchise India & Zee Business Small Business awards in Mumbai for registering a 600 percent growth in the first year of its operations. RE/MAX is also planning to organize India’s first Realty Exchange for Brokers which will be a 14 day Industry Event covering different facets of the industry. This will also include a world class Real Estate Brokerage Education chapter to India’s first Developer to Broker Property Exposition.

Tagged as: bangalore, business, chennai, country, faridabad, gurgaon, kolkata, mumbai, power, real estate, sahara

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High Prices and Rising Mortgage Hurting Real Estate Demand

by Paul Joseph September 23, 2010 Uncategorized

High prices and rising mortgage rates are hurting demand in India’s once-booming housing market, jeopardising a pipeline of about $6 bn in initial public offerings (IPOs) from Indian property companies. The real estate firms are seeking funds to finance land acquisitions and lock in runaway land prices but their IPOs are faced with the prospect of poor investor response. “All the big developers (with IPO plans) are waiting. They want to raise money for new projects but they are already holding so much inventory,” said Surajit Pal, sector analyst at brokerage Elara Capital. At least 12 real estate firms are suspending their offers despite getting final regulatory approval, according to analysts. Another six to seven firms have filed their draft prospectus. But only three real estate IPOs have hit the market so far this year. The line-up includes a long-delayed IPO from Emaar MGF, the Indian JV of Dubai’s Emaar Properties, a $600 mn IPO from Lodha Developers, a $600 mn offer from Sahara Prime City and a $515 mn issue from Embassy Property. An unhappy confluence of negatives means the prospects aren’t likely to brighten soon for Indian developers and their IPOs. Land costs are one issue. Land now accounts for two-thirds of total cost in some projects, compared with an average of 40 to 50 percent previously. In June, Lodha, among India’s top developers by sales signed India’s costliest land deal, agreeing to pay $850 mn for a plot in central Mumbai. Last month, Indiabulls Real Estate won two plots at land auctions in Mumbai for $430 mn, or twice the asking rate. “These are the highest-ever land prices paid at a time when housing prices have already crossed the peaks in 2007,” said Sanjay Dutt, chief executive at property services firm Jones Lang LaSalle India. To get their returns on the high land prices, developers have to push up prices for their housing units. “Only high-end apartments may be possible on these plots, and there is a limited target audience for that,” Dutt said, referring to the land auctions in Mumbai.

Tagged as: delhi, indian, noida, sahara

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