2. • Meaning -A fraudulent
business scheme
• Examples- Coal scam ,
Harshad Mehta scam,
Satyam scam, Sahara scam
3. SAHARA INDIA PARIWAR
• An Indian conglomerate
• Headquartered in Lucknow, India
• Business interests in Finance, Construction, Mass media,
Retailing
• US$25.94 billion as of March 2011
• owns a 42.5% stake in Formula One's
• Founded by Subrata Roy in 1978
4. SUBRATA ROY
• Key man of Sahara
• named among the 10 Most Powerful People of
India in 2012 by India Today
• 2004, the group was termed by the Time
magazine as ‘the second largest employer in
India'
• Humanitarian efforts-In 2013, Sahara
contributed to the relief efforts in flood hit
Uttarakhand , 25 medical health unit vans
equipped with doctors and free medicines
• Awards-Business Icon of the Year award at of
Fame Awards in London in 2011,Global
Leadership, Best Industrialist Award
5. SAHARA SCANDAL
• Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited
(SHIC) issued Optionally Fully Convertible Debentures (OFCDS) through subscriptions from investors with effect
from 25th April 2008 up to 13th April 2011
• Raised around Rs.20000 crores from investors
• The purpose of issue was to carry out infrastructure activities namely, constructing the bridges,modernzing or setting
up of airports, rail system or any other projects which may be allotted to the company
• As per Sahara issue of OFCDs was private placement
• Amount was collected from 30 million investors
• Later, Sahara Prime City Limited intended to raise funds through listing of its shares filed prospectus to SEBI
• While processing the prospectus ,SEBI received complaint from one of the investor and “Professional Group of
Investors Protection”
6. Optionally Fully Convertible Debenture
• Kind of Bond
• Can be converted into Equity Shares by the investors
• Hybrid market instrument that would come under the jurisdiction of
the SEBI
SAHARAs OFCDs
• Sahara issued OFCDs
• Didn’t File a request with SEBI
• To get it approved and then start the collection of
public money
7. TIME LINE OF EVENTS
• November 2010 - Securities and Exchange Board of India bars Sahara India Pariwar
chief Subrata Roy and two of its companies - Sahara India Real Estate Corp (SIREC)
and Sahara Housing Investment Corp (SHIC) from raising money from the public as
they raised several thousand crores through optionally fully convertible debentures
which SEBI deemed illegal
• January 2011 - Delhi High court issued a warrant against Sahara India Pariwar
chairman Subrata Roy and four other officials of the group on a complaint that it
deceived investors in a proposed housing project of Rs.25,000 crore.
• May 2011 - Supreme court of India asked Sahara India Real Estate (SIREC) to furnish
the format of the application for an optionally fully convertible debentures (OFCD)
scheme and a list of accredited agents which raised money on company's behalf.
8. • June 2011 - SEBI ordered Sahara firms to immediately refund the money collected
through sales of OFCDs.
• October 2011 - Securities Appellate Tribunal (SAT) ordered two unlisted Sahara Group
companies to refund within six weeks about 17,656.53 crore with 15% interest which it
had raised through a flotation of OFCDs.
• January 2012 - Supreme Court gives three weeks time to Sahara India Pariwar to
choose between options to secure investments made by public in OFCD scheme. Either
to give sufficient bank guarantee or attach properties worth the amount raised through
OFCD's.
• August 2012 - Supreme court directs Sahara India Real Estate Corporation Ltd.
(SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) to refund
over Rs. 24,400 crore.
9. February 2014 –Subrata Roy arrested by
Uttar Pradesh police for failure to appear
before the Supreme Court.
March 2014 - Subrata Roy, along with two
other directors of Sahara, sent to Tihar jail.
March 2015 - Supreme Court stated that the
total dues from Sahara have gone up to Rs
40,000 crore with the accretion of interest.
July 2015 - SEBI cancelled the licence of
Sahara’s mutual fund business.
May 2016 - Subrata Roy released on parole
from Tihar jail
