The Securities Appellate Tribunal (SAT) today criticised the manner through which the Sahara Group mobilised Rs 19,000 crore from the public when none of its three promoter-directors neither held any stake in Sahara India Real Estate and Sahara Housing Investment Corp, the companies in question, nor were on the board.

“How are investors protected if three directors have already quit. This is really bothering us. Also, those who actually presented the DHRP (draft red herring prospectus) before the RoC have quit (when the funds were raised),” the SAT Presiding Officer, Mr N K Sodhi, told the Sahara counsel, Mr Fali S Nariman, here.

This observation came when Mr Nariman told the SAT through an affidavit that the three Sahara promoters held no stake in the companies that approached the public for Rs 19,000 crore through an optional fully convertible debenture (OFCD) issue, and that these promoter directors had quit after authorising fund mop-up.

“When the DHRP for OFCD issue was filed, its share capital was nil. What were the respective stakes of the company's promoters? The DHRP says the three directors who promoted the company had already left.

The case relates to a June 2011 SEBI order which asked the two firms to refund the money raised from an OFCD issue and restrained them from accessing the capital markets.

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