Sahara had 2 crore investors in one firm

Sahara India Real Estate Corporation had garnered investments from over 2 crore investors through three separate securities, according to an affidavit the company filed on Wednesday.

The company placed the document  as part of the ongoing proceedings in the Securities Appellate Tribunal, where it has appealed against an order from the stock market regulator.

The original Securities and Exchange Board of India (SEBI) order had made reference to an estimated 66 lakh investors, which it noted was larger than the investor base of the ‘listed company with the biggest market capitalisation’ which had only under 40 lakh investors.

The latest affidavit puts the figure at more than thrice that. With more than 2 crore investors, Sahara’s securities had more takers than many large mutual funds.

The top three mutual funds have 1.43 crore folios or individual investor accounts, according to data from the Association of Mutual Funds in India.

The document also gave details of the capital the company still holds and its utilisation of the collected funds in various real estate projects.

A second affidavit on Sahara Housing Investment Corporation is yet to be read out.

Sahara India Real Estate Corporation and Sahara Housing Investment Corporation had raised money from the public by issuing a hybrid instrument known as optionally fully convertible debentures (OFCDs), allegedly in violation of the Companies Act and SEBI regulations.

SEBI had asked Sahara entities which raised money from the public in violation of regulations to refund the money with an interest of 15% per annum.

The stock market regulator has also restrained promoter Subrata Roy Sahara, two Sahara group companies and their directors from accessing the securities market.

The company approached the Supreme Court which redirected their appeal to the SAT.

According to the affidavit, the company filed in SAT on Wednesday, Sahara India Real Estate issued three separate securities, which were subscribed by a total of 2.2 crore investors.

They were distributed by agents of an erstwhile residuary non-banking finance company which belonged to the group company. These agents were not employees of the company but received remuneration from it, said the affidavit.

The number of investors was at 1.21 crore and the funds mobilised stood at Rs17,656 crore as per the latest figures that Sahara provided.

The parent company also infused capital in excess of Rs2,000 crore in Sahara India Real Estate Corporation.

The funds were utilised for various real estate projects. These projects had a book value, or value in the book of accounts usually based on original price, of Rs22,000 crore. The value of these assets, which includes land as well as development rights has a realisable market value of Rs56,318 crore, said the document read out in court.

The lawyers for Sahara also argued that optionally fully convertible debentures, which carry a fixed price are not listed on either the Bombay Stock Exchange or the Calcutta Stock Exchange.

The opposing lawyers countered that there were 50 OFCDs listed on the National Stock Exchange, though they requested time to find out if these carried a fixed price.

The case is set to be heard again on Thursday. The argument continues.