SEBI VS SAHARA: In Sahara Desert- Distress Hours [compatibility mode]

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EquiCorp Associates Advocates & Solicitors In Sahara Desert- Distress Hours www.equicorplegal.com In Sahara Desert- Distress Hours

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The high-profile saga -- which saw the arrest of flamboyant Sahara group chief Subrata Roy, who calls himself "Managing Worker" of his business empire -- has seen many dramatic events along the way including many emotional pitches by Sahara group, which claims to have a networth of over INR 68,000 crore and assets worth over INR 1.5 lakh crore. Would the Company like Sahara, Rose Valley etc. have any legal viable option to continue their business within the framework of our laws?? Yes they have though fewer option but they do have options

Transcript of SEBI VS SAHARA: In Sahara Desert- Distress Hours [compatibility mode]

Page 1: SEBI VS SAHARA: In Sahara Desert- Distress Hours [compatibility mode]

EquiCorp AssociatesAdvocates & Solicitors

In Sahara Desert- Distress Hourswww.equicorplegal.com

In Sahara Desert- Distress Hours

Page 2: SEBI VS SAHARA: In Sahara Desert- Distress Hours [compatibility mode]

In Sahara Desert- Distress Hours

Once upon a time, Sahara’s Subrarta Roy- a friend to allwho came calling-whether a matinee idol in his 80s or asports star in her teens, self bestowed title- “Sahara Shri”-the sponsor of the Indian cricket team and a group headedby a colourful, flamboyant CEO hobnobbing withBollywood stars and cowbelt politicians could boast ofhaving friends in high places. Today in this distress hours,there seems to be few people who he can turn to in his hourof distress.

Once upon a time, Sahara’s Subrarta Roy- a friend to allwho came calling-whether a matinee idol in his 80s or asports star in her teens, self bestowed title- “Sahara Shri”-the sponsor of the Indian cricket team and a group headedby a colourful, flamboyant CEO hobnobbing withBollywood stars and cowbelt politicians could boast ofhaving friends in high places. Today in this distress hours,there seems to be few people who he can turn to in his hourof distress.

www.equicorplegal.com

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For the sleepy Lucknow of the 1990s whose favourite past-time seemed to bereminiscing the city’s long gone glory days, Subrata Roy Sahara brought a cash ofheavy bling and some more. Sahara has stayed afloat for more than 35 yearsdespite repeated regulatory onslaughts. The first setback was in the late '90s whenRBI slashed the discretionary investment powers of its finance firm. The nextblow came in 2006 when its depository services firm had to be shut down. The bigjolt came in 2008 when RBI left the finance company, the group's money-spinner,with no choice but to wind down. But, soon Sahara advertised a mega townshipventure spanning across cities. The absence of a regulator and spiralling propertyprices had driven the foray into real estate.

The high-profile saga -- which saw the arrest of flamboyant Sahara group chiefSubrata Roy, who calls himself "Managing Worker" of his business empire -- hasseen many dramatic events along the way including many emotional pitches bySahara group, which claims to have a networth of over INR 68,000 crore andassets worth over INR 1.5 lakh crore.

For the sleepy Lucknow of the 1990s whose favourite past-time seemed to bereminiscing the city’s long gone glory days, Subrata Roy Sahara brought a cash ofheavy bling and some more. Sahara has stayed afloat for more than 35 yearsdespite repeated regulatory onslaughts. The first setback was in the late '90s whenRBI slashed the discretionary investment powers of its finance firm. The nextblow came in 2006 when its depository services firm had to be shut down. The bigjolt came in 2008 when RBI left the finance company, the group's money-spinner,with no choice but to wind down. But, soon Sahara advertised a mega townshipventure spanning across cities. The absence of a regulator and spiralling propertyprices had driven the foray into real estate.

The high-profile saga -- which saw the arrest of flamboyant Sahara group chiefSubrata Roy, who calls himself "Managing Worker" of his business empire -- hasseen many dramatic events along the way including many emotional pitches bySahara group, which claims to have a networth of over INR 68,000 crore andassets worth over INR 1.5 lakh crore.

www.equicorplegal.com

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SEBI VS SAHARA

The Sebi-Sahara case itselfcomprises staggering numberslike collection of over Rs 24,000crore from three croreindividuals. The case also hasbrought to headlines numerousfinancial jargons like OFCDs,DRHP and RHP, as alsonumerous innocuous soundingnames like Kalawati, Hardwarand the famous 'Roshan Lal'.

The Sebi-Sahara case itselfcomprises staggering numberslike collection of over Rs 24,000crore from three croreindividuals. The case also hasbrought to headlines numerousfinancial jargons like OFCDs,DRHP and RHP, as alsonumerous innocuous soundingnames like Kalawati, Hardwarand the famous 'Roshan Lal'.

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Wayout

Is there any way-out to regulate their micro finance business/raisingpublic deposits in real estate?? Though there are not many legal optionsavailable, however, Sahara could have registered their public raisingschemes in real estate under Collective Investment Scheme with SEBI.Perhaps, what many in Sahara did not realise was that circumstanceswere turning against them. Also, there were cardinal mistakes by a groupthat often operated in the regulatory twilight zone. A shadowy empiregiving up closely monitored financial services to slowly venture into realestate would not have necessarily drawn the attention of unfriendlypoliticians and a no-nonsense SEBI.

Though it's a pity that more than a million would lose their jobs if Saharashrinks

Is there any way-out to regulate their micro finance business/raisingpublic deposits in real estate?? Though there are not many legal optionsavailable, however, Sahara could have registered their public raisingschemes in real estate under Collective Investment Scheme with SEBI.Perhaps, what many in Sahara did not realise was that circumstanceswere turning against them. Also, there were cardinal mistakes by a groupthat often operated in the regulatory twilight zone. A shadowy empiregiving up closely monitored financial services to slowly venture into realestate would not have necessarily drawn the attention of unfriendlypoliticians and a no-nonsense SEBI.

Though it's a pity that more than a million would lose their jobs if Saharashrinks

www.equicorplegal.com

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In the recent past, SEBI has discovered several entities such as Sahara, Rose Valleyetc. been deployed to raise capital from investors without following the prescribedregulatory framework. To safeguard the interest of hapless investors and curb theproliferation of unregulated schemes being operated, SEBI has brought under thescope of the CIS Regulations all such schemes launched by any operator in any fieldas long as they fell within the four corners of the definition of a CIS.

Recent amendments to the SEBI Act provide more powers to SEBI for enforcementagainst unregistered pooling vehicles. Under the amendments SEBI has been grantedpowers to regulate any scheme or arrangement, if such scheme is not registered withSEBI, and involves a corpus of INR 100 Crore (INR 1 billion) or more. This powercan be viewed as an attempt to limit any challenges from parties contending that aparticular fund raising activity is not covered under the purview of CIS Regulationsmerely because it is not specifically covered under Section 11AA of the SEBI Act.Further, SEBI has now been granted the authority to carry out search and seizureoperations and attach assets in case of non-compliance.

If you are interested in further details and inclined to know the procedure of CISregistration, click on the link below or contact us:

http://www.equicorplegal.com/Pdfs/ECA-%20Collective%20Investment%20Scheme.pdf

In the recent past, SEBI has discovered several entities such as Sahara, Rose Valleyetc. been deployed to raise capital from investors without following the prescribedregulatory framework. To safeguard the interest of hapless investors and curb theproliferation of unregulated schemes being operated, SEBI has brought under thescope of the CIS Regulations all such schemes launched by any operator in any fieldas long as they fell within the four corners of the definition of a CIS.

Recent amendments to the SEBI Act provide more powers to SEBI for enforcementagainst unregistered pooling vehicles. Under the amendments SEBI has been grantedpowers to regulate any scheme or arrangement, if such scheme is not registered withSEBI, and involves a corpus of INR 100 Crore (INR 1 billion) or more. This powercan be viewed as an attempt to limit any challenges from parties contending that aparticular fund raising activity is not covered under the purview of CIS Regulationsmerely because it is not specifically covered under Section 11AA of the SEBI Act.Further, SEBI has now been granted the authority to carry out search and seizureoperations and attach assets in case of non-compliance.

If you are interested in further details and inclined to know the procedure of CISregistration, click on the link below or contact us:

http://www.equicorplegal.com/Pdfs/ECA-%20Collective%20Investment%20Scheme.pdf

www.equicorplegal.com

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www.equicorplegal.com

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Consult the Experts-ECA

Complete assistance for making the necessary filings,applications etc. for obtaining SEBI’s approval to operateas CIMC and to launch CIS.Informal discussion with contact personnel within SEBIso as to perfect the application before the same issubmitted.Follow up support at various points in time during andafter the pendency of the application so as to ensure thatany additional documents/records requested by SEBI issubmitted in a systematic and timely manner. Updating Company on a regular basis as to the status ofthe pending application.

Complete assistance for making the necessary filings,applications etc. for obtaining SEBI’s approval to operateas CIMC and to launch CIS.Informal discussion with contact personnel within SEBIso as to perfect the application before the same issubmitted.Follow up support at various points in time during andafter the pendency of the application so as to ensure thatany additional documents/records requested by SEBI issubmitted in a systematic and timely manner. Updating Company on a regular basis as to the status ofthe pending application.

www.equicorplegal.com

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About Us Equi Corp Associates (ECA) is a mission driven, start-up law practice based in New

Delhi, India and founded in 2012 for providing affordable access to legal counselbenefitting start-ups, small and growing businesses, social business enterprises, impactinvestors and non-profit organizations. Our boutique service offerings are primarily at theintersection of start-up, sustainable development, social enterprise and investmentsectors, designed to help clients wade through laws that were not originally designedwith them in mind.

The basic idea behind starting ECA was to be a part of India’s growth by reaching out tonovel start-ups and established businesses, and helps them adapt best globalpractices/technologies in local conditions and in advising them about legal aspectsinvolved in modern markets in order to keep our clients in pace with the dynamiccompetitive environment.

ECA is instrumental in advising various social enterprises and start ups in setting uptheir business in India.

ECA not only having some of the best legal minds, but the best business minds too:lawyers are intimately familiar with the business environment, and know the emergingrisks and opportunities of their industries and practice groups.

Equi Corp Associates (ECA) is a mission driven, start-up law practice based in NewDelhi, India and founded in 2012 for providing affordable access to legal counselbenefitting start-ups, small and growing businesses, social business enterprises, impactinvestors and non-profit organizations. Our boutique service offerings are primarily at theintersection of start-up, sustainable development, social enterprise and investmentsectors, designed to help clients wade through laws that were not originally designedwith them in mind.

The basic idea behind starting ECA was to be a part of India’s growth by reaching out tonovel start-ups and established businesses, and helps them adapt best globalpractices/technologies in local conditions and in advising them about legal aspectsinvolved in modern markets in order to keep our clients in pace with the dynamiccompetitive environment.

ECA is instrumental in advising various social enterprises and start ups in setting uptheir business in India.

ECA not only having some of the best legal minds, but the best business minds too:lawyers are intimately familiar with the business environment, and know the emergingrisks and opportunities of their industries and practice groups.

www.equicorplegal.com

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ECA’s Network Presence

Delhi/NCR

Dehradun

Jaipur Allahabad Guwahati

Mumbai

Bangalore

Our AssociatedOffice

Kolkata

Hyderabad

Chennai

ECA

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WHY Equi Corp Associates??

• ECA is a multispecialty law firm, with its founding partners having a vastexperience for providing legal services to a variety of domestic & internationalclients, corporations, financial entities & government agencies.

• Our respected clients - from individuals to small businesses to Fortune 500companies -- turn to us for trusted legal counsel.

• ECA is equipped with required professional setup of Qualified, Experienced andKnowledgeable members.

• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurswith legal services that enables them to compete with best in world in themodern economy characterised by technology based, venture capital funded,futuristic businesses governed by complex and ever evolving legal andstatutory framework.

• ECA is also effective in providing match making partner/locating strategicalliance, follow up and representation with Government of India or any otherincidental work related to investment or legal guidance in India.

• ECA is a multispecialty law firm, with its founding partners having a vastexperience for providing legal services to a variety of domestic & internationalclients, corporations, financial entities & government agencies.

• Our respected clients - from individuals to small businesses to Fortune 500companies -- turn to us for trusted legal counsel.

• ECA is equipped with required professional setup of Qualified, Experienced andKnowledgeable members.

• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurswith legal services that enables them to compete with best in world in themodern economy characterised by technology based, venture capital funded,futuristic businesses governed by complex and ever evolving legal andstatutory framework.

• ECA is also effective in providing match making partner/locating strategicalliance, follow up and representation with Government of India or any otherincidental work related to investment or legal guidance in India.

www.equicorplegal.com

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Our CommitmentValue

One stop legal boutique where assignments carried out at a fraction ofthe cost of clients staff

Reduce client staff management time and overhead costs, and increaseclients profitability

Enable clients staff to concentrate on more interesting and value-addedwork

Service Robust management and procedures to ensure delivery on time and on

budget Dedicated one-to-one communication with client, to ensure every

project is right first time Full service delivery is achieved by synergies of subject matter

expertise of our in-house Lawyers, Chartered Accountants, CompanySecretaries and Tax Consultants

Quality Two-level file review and signoff by expert Lawyers, even for the

smallest assignment

Value One stop legal boutique where assignments carried out at a fraction of

the cost of clients staff Reduce client staff management time and overhead costs, and increase

clients profitability Enable clients staff to concentrate on more interesting and value-added

workService

Robust management and procedures to ensure delivery on time and onbudget

Dedicated one-to-one communication with client, to ensure everyproject is right first time

Full service delivery is achieved by synergies of subject matterexpertise of our in-house Lawyers, Chartered Accountants, CompanySecretaries and Tax Consultants

Quality Two-level file review and signoff by expert Lawyers, even for the

smallest assignmentwww.equicorplegal.com

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Our Core Strengths

Dedicated team of legal professionals with strong deal exposure andknowledge of regulations of various sectors.

Proactive and structured approach

Well defined processes

Well defined Project methodology tailored to suit the needs of clients forservice delivery

Talented team with experience of working with some of the largestcompanies in India exposure to leading cross border transactions in India

Experience & proven capabilities to handle Diversified Multi-national Clientsi.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & GasSector, Retail Trading, Hospitality, Restaurant and related sectors.

Competitive advantage of costing by virtue of expertise and experiencedresources.

Dedicated team of legal professionals with strong deal exposure andknowledge of regulations of various sectors.

Proactive and structured approach

Well defined processes

Well defined Project methodology tailored to suit the needs of clients forservice delivery

Talented team with experience of working with some of the largestcompanies in India exposure to leading cross border transactions in India

Experience & proven capabilities to handle Diversified Multi-national Clientsi.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & GasSector, Retail Trading, Hospitality, Restaurant and related sectors.

Competitive advantage of costing by virtue of expertise and experiencedresources.

www.equicorplegal.com

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The Verticals

• Corporate & Commercial

• Banking & Finance

• Real Estate

• Infrastructure & Project Finance

• Employment & Labour

• Media, Sports & Entertainment

• Litigation & Arbitration

• Tax & Consulting

• Intellectual Property

• Corporate & Commercial

• Banking & Finance

• Real Estate

• Infrastructure & Project Finance

• Employment & Labour

• Media, Sports & Entertainment

• Litigation & Arbitration

• Tax & Consulting

• Intellectual Property

The Firm specializes in verticals suchas IT, ITES, Bio-tech, Power, Water,Retail Trade, Education, Mining,Aviation, Tourism, Insurance,Telecom, Media & Entertainment

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Corporate & Commercial Services

Foreign Investment in India / Abroad

Drafting and vetting of Joint Venture Agreements, CorporateAgreements, Management Agreement, Cross border transactionagreements etc.,

Compliance Audit, Due Diligence & Transaction Advisory;

Formation & structuring of business entities;

Mergers & Acquisitions & Private Equity;

Competition & Fair Trade Practice;

Corporate Governance & Restructure;

Venture Fund, Mutual Fund, RE Trust Funds.

Foreign Investment in India / Abroad

Drafting and vetting of Joint Venture Agreements, CorporateAgreements, Management Agreement, Cross border transactionagreements etc.,

Compliance Audit, Due Diligence & Transaction Advisory;

Formation & structuring of business entities;

Mergers & Acquisitions & Private Equity;

Competition & Fair Trade Practice;

Corporate Governance & Restructure;

Venture Fund, Mutual Fund, RE Trust Funds.

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Real Estate Services

Title Search & Property transactions Joint ventures in Real Estate Build to suit campuses Development of Technology Parks, Integrated Townships,

Warehouse & Logistics Parks, SEZ, Hotels, MultiplexesEntertainment Centres, Slum Developments,Rehabilitation Projects etc.

Sale deeds Lease, Leave and License Agreements Gift deeds Mortgage & Finance Agreements

Title Search & Property transactions Joint ventures in Real Estate Build to suit campuses Development of Technology Parks, Integrated Townships,

Warehouse & Logistics Parks, SEZ, Hotels, MultiplexesEntertainment Centres, Slum Developments,Rehabilitation Projects etc.

Sale deeds Lease, Leave and License Agreements Gift deeds Mortgage & Finance Agreements

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Infrastructure & Project Finance Services

Transaction Advisory: Energy, Oil and Gas, Highway, Road,Airport, Ports, Water & Sanitation and Telecommunications

Drafting, negotiations and review of financing & securitydocuments

Tender Documents, Bidding process, PPP, ConcessionContracts, PPA, EPC Contracts

Government Approvals & Liaisoning with statutoryauthorities

Structuring, negotiation & documentations of projects

Transaction Advisory: Energy, Oil and Gas, Highway, Road,Airport, Ports, Water & Sanitation and Telecommunications

Drafting, negotiations and review of financing & securitydocuments

Tender Documents, Bidding process, PPP, ConcessionContracts, PPA, EPC Contracts

Government Approvals & Liaisoning with statutoryauthorities

Structuring, negotiation & documentations of projects

www.equicorplegal.com

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Employment & Labour Services

Appointment/Offer letters, Termination practices

Employee Stock Option Plan

Employee Handbook

Labour Compliance

Service Bonds

Standing Orders & Service Rules

Migration & Emigration of Employees

Country specific employment relation

Grievance Settlement Procedures

Appointment/Offer letters, Termination practices

Employee Stock Option Plan

Employee Handbook

Labour Compliance

Service Bonds

Standing Orders & Service Rules

Migration & Emigration of Employees

Country specific employment relation

Grievance Settlement Procedures

www.equicorplegal.com

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Media, Sports & Entertainment Services

Television & News Channel; Media & Production Houses; Endorsements, Distribution, Event Sponsorship,

Venue, Marketing Rights, Merchandise Agreements; FM Radio Channels; Publishing House; Studios; Sports Club

Television & News Channel; Media & Production Houses; Endorsements, Distribution, Event Sponsorship,

Venue, Marketing Rights, Merchandise Agreements; FM Radio Channels; Publishing House; Studios; Sports Club

www.equicorplegal.com

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Litigation & Arbitration Services

Commercial Litigation

Recovery/Enforcement

Civil Litigation

Medical Negligence

IP Litigation

Arbitration

White Collar Crimes

Economic Offences

Bankruptcy/Insolvency

Criminal Litigation

Commercial Litigation

Recovery/Enforcement

Civil Litigation

Medical Negligence

IP Litigation

Arbitration

White Collar Crimes

Economic Offences

Bankruptcy/Insolvency

Criminal Litigationwww.equicorplegal.com

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Tax & Consulting Services

Company Secretarial Services:- Incorporation of companies/branches/liaison

office/representative office- Maintenance of Secretarial Record and recurring

secretarial services- Registration with Statutory Authorities including

Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.

Accounting & Payroll Services Tax and Regulatory Services Advising on Customs & Excise matters Immigration Services

Company Secretarial Services:- Incorporation of companies/branches/liaison

office/representative office- Maintenance of Secretarial Record and recurring

secretarial services- Registration with Statutory Authorities including

Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.

Accounting & Payroll Services Tax and Regulatory Services Advising on Customs & Excise matters Immigration Services

www.equicorplegal.com

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Intellectual Property Services

IP Portfolio Management IP Auditing IP Strategic Alliances

Collaboration Licensing Technology Transfer Agreements

Search, drafting, filing and prosecution in : Patents Trademarks Copyrights Industrial Designs

IP Portfolio Management IP Auditing IP Strategic Alliances

Collaboration Licensing Technology Transfer Agreements

Search, drafting, filing and prosecution in : Patents Trademarks Copyrights Industrial Designs

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Page 25: SEBI VS SAHARA: In Sahara Desert- Distress Hours [compatibility mode]

For further informationContact :

Aashish SrivastavaPartner

Equi Corp AssociatesAdvocates & Solicitors

W-86, Classic House, GK-II, New DelhiT: +91 11 40573261

Mobile : +919958709189E-mail :[email protected]

W:www.equicorplegal.com