Sahara bends public issue rules on housing bonds
Subrata Roy-led Sahara India Pariwar is raising funds from retail investors through housing bonds, sold by two of its group firms without seeking approval from the capital market regulator Securities and Exchange Board of India (Sebi).
Sahara Housing Investment Corp. Ltd and Sahara India Real Estate Corp. Ltd had filed a red herring prospectuses with the registrar of companies (RoC) to raise money through a private placement of instruments known as optionally fully convertible debentures (OFCDs).
A registered non-banking finance company (NBFC) needs the Reserve Bank of India (RBI) approval before selling bonds to the public, while others need clearance from the capital market regulator.
Any issue of debt or equity to 50 persons or more qualifies as a public issue and requires disclosures by the issuer in accordance with Sebi (issue and listing of debt instruments) regulations, 2008.
Using their agent network, Sahara Housing and Sahara India Real Estate are selling the bonds across the country, promising returns that could be as much as six times the investment.
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