Sucheta Dalal :Collective Investment Schemes: SEBI has done a great job on Sahara but what about the others
Sucheta Dalal

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Collective Investment Schemes: SEBI has done a great job on Sahara but what about the others  

October 3, 2012

While we laud SEBI for the dogged pursuit of the Saharas, which issued over Rs17,500 crore worth of OFCDs, the regulator is strangely silent about Osian Art Fund.


Sucheta Dalal

As we go to print, the Securities & Exchanges Board of India (SEBI) is moving the Supreme Court with an application to say that Sahara India’s twin group companies (the Saharas), which had been ordered to refund over Rs24,000 crore in 90 days, have not provided all the information that was ordered to be collected by the apex court. Meanwhile, Mayank, a chartered accountant from Surat who had invested in the optionally fully convertible debentures (OFCD), writes to say that agents of Sahara are now advising investors like him to invest “in their new Q-Shop plan” which is offering very high returns. This suggests that Sahara is quite unfazed by the Supreme Court order and SEBI’s quick follow-up is well warranted.

While we laud SEBI for the dogged pursuit of the Saharas, which issued over Rs17,500 crore worth of OFCDs, the regulator is strangely silent about Osian Art Fund. The much-hyped art fund had similarly escaped SEBI’s scrutiny and there is no follow-up after a show-cause notice had been issued to the company. Osian investors continue to write to Moneylife saying they have not even received their full principal; the Fund’s promoter Neville Tuli or its chairman dutifully respond to those complaints that we forward, promising repayments. Others complain that they don’t even get a response. ABN Amro Bank (now RBS), which actively hawked the Fund to hundreds of its clients, does not respond to emails nor seems to be pursuing Osian. Interestingly, media reports show that the company is making a comeback; it has held another exhibition recently and apparently owns many high-value paintings as well as a Mumbai theatre (Minerva) that it purchased in its heydays.

A third company, the Jaipur-based PACL (brand name Pearls) which sold plots of land to the gullible and collected over Rs20,000 crore over several years and was also hoping to make a public issue, has also vanished into oblivion. SEBI had started an investigation, leading to a huge front-page story in The Economic Times, after which the company had rushed to appoint a high-profile lawyer and consolidate its claimed land-holdings under a trustee company. However, no further action seems to have been initiated by the regulator. Does SEBI have a process to prioritise certain investigations that involve large sums of public money? Has the SEBI board or its advisory committees ever proposed or addressed this? Or do they only discuss an agenda set by the SEBI chairman?


-- Sucheta Dalal



 



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