SEBI Moves Supreme Court Against SAT Relief to Sahara Officials in ₹14,106 Crore OFCD Case

June 13, 2026 : The Securities and Exchange Board of India (SEBI) has approached the Supreme Court challenging a recent order of the Securities Appellate Tribunal (SAT) that granted relief to four managers and the Company Secretary of Sahara India Commercial Corporation Limited (SICCL) in the long-running ₹14,106 crore Optionally Fully Convertible Debentures (OFCD) case involving nearly 1.98 crore investors.

SEBI’s appeal is directed against the portion of SAT’s March 9, 2026 judgment that removed liability from the managers and the Company Secretary, while upholding the regulator’s findings and directions against SICCL, Sahara India, its promoter, and directors. The matter is expected to be heard on June 18 by a Bench comprising Chief Justice of India Surya Kant and Justice V Mohan.

The case stems from SEBI’s investigation into Sahara Group’s fund-raising activities through OFCDs. According to the regulator, SICCL raised approximately ₹14,106 crore from nearly 1.98 crore investors between July 1998 and June 2008 through OFCD issuances, allegedly in violation of the Companies Act, 1956, and securities market regulations.

SICCL had argued that the debentures were issued through private placements to a select group of investors and therefore did not fall within the regulatory framework governing public issues. However, SEBI maintained that the company failed to prove that the offers were restricted to specifically identified individuals and contended that the massive scale of the fund mobilisation effectively made the issuances public offerings.

Agreeing with SEBI, SAT held that the OFCDs were issued to nearly two crore investors, far exceeding the threshold prescribed under Section 67(3) of the Companies Act, 1956. The Tribunal concluded that the issuances constituted public issues and were therefore subject to SEBI’s jurisdiction and securities law requirements.

SAT also found that SICCL had launched the issue without obtaining approval from a recognised stock exchange and without securing registration under Section 12(1-B) of the SEBI Act. Consequently, it upheld SEBI’s findings that the company had violated statutory provisions governing public fund mobilisation and securities markets.

Rejecting SICCL’s argument that the proceedings suffered from undue delay, SAT observed that SEBI initiated action after receiving information from the Ministry of Corporate Affairs regarding the alleged violations. The Tribunal further dismissed the company’s claim that most investors had already been repaid or had their investments converted into equity, noting that SICCL failed to provide adequate documentary evidence to substantiate repayment to nearly 1.98 crore investors.

While affirming SEBI’s action against SICCL and its directors, SAT granted relief to four managers and the Company Secretary. The Tribunal noted that they had already been exonerated as “officers in default” under Section 73 of the Companies Act. It further held that the managers, being salaried employees, could not automatically be held liable for the company’s decisions. Regarding the Company Secretary, SAT observed that the prospectus had been signed under powers of attorney granted by the directors, who remained legally responsible as principals.

Challenging this relief, SEBI has now moved the Supreme Court seeking restoration of liability against the managers and the Company Secretary, arguing that SAT erred in setting aside the findings against them.