Dismissing an appeal in Sahara India Real Estate Corporation Limited & Ors v Securities and Exchange Board of India & Anr, the Supreme Court held that listing on a stock exchange is a “legal responsibility of the company which offers securities to the public, provided offers are made to more than 50 persons”.
In making this ruling the court upheld the power of the Securities and Exchange Board of India (SEBI) to enquire into the issue of hybrid securities by unlisted public limited companies as private placements when offered to more than 50 persons.
SEBI had found that Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) violated existing rules by issuing optionally fully convertible debentures (OFCDs) after filing a red herring prospectus with the registrar of companies and not informing SEBI.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
