New Delhi: Market regulator SEBI's action in seizing Sahara's assets has opened up a Pandora's box. The company's claim that it has paid back investors holds little water. SEBI says Sahara could not have made any refund after August 2012. The Supreme Court order directed Sahara to deposit the refund money with SEBI, not pay investors directly. The company has little option but to pay up now.
SEBI's action puts Sahara's future in doubt. The company has a controlling, 42.5 per cent stake in Force India's F1 team and sponsors both the cricket and hockey teams.
In August 2012, Sahara announced a deal to buy a stake in New York's iconic Plaza Hotel. Reports suggest the money for this has already been raised - but Sahara's ability to raise more money is in doubt.
The SEBI action though will act as a deterrent. Corporate Affairs Minister Sachin Pilot has said tougher norms will be brought in to avoid misuse during private placements.
While there's a question mark over Sahara's future, the SEBI action has brought to the forefront its intention to protect the small investor, and crack its whip as a market regulator.