The Supreme Court on Thursday asked market regulator SEBI to proceed with its probe into the Sahara Group’s Optionally Fully Convertible Debentures (OFCD) scheme, and warned that investors may get cheated like they did in the Harshad Mehta scam.
A three-judge bench headed by Chief Justice SH Kapadia questioned the OFCD scheme and sought to know from the group the law under which it was floated.
The bench asked the advocate: “Till today, I do not know what OFCD is. How can some investors know about it? We want SEBI to decide.” It further told him: “Investors are not aware of OFCD. At the end of the day, they would come and say that they were cheated... You know Harshad Mehta’s case, same modus operandi was there. Investors were not aware.”
The court disagreed with Sahara counsel’s plea that the OFCD scheme did not come under SEBI’s purview. Asking the regulator to pass an order, the bench clarified SEBI’s order would not be operational till the court gave further directions.
The bench also permitted Allahabad High Court, where the Sahara group has challenged SEBI’s direction to give details of its investors, to proceed with its hearing.