SC tells SEBI to freeze Sahara Group accounts

The Supreme Court today ruled that the Securities and Exchange Board of India (SEBI) is free to freeze accounts and seize properties of two companies of the Sahara Group on account of its defying court orders by not refunding Rs24,000 crore to investors.

The apex court in fact pulled up SEBI for not taking action against the companies - Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC) - as per its 31 August 2012 order, which had asked it to attach properties and freeze bank accounts of the companies.

It issued notice to the group to respond within four weeks on why contempt action should not be initiated against the companies for not complying with its order.

"What steps are you taking? You are not taking any action. The judgment tells you what to do but you are not doing it," a bench of Justices K S Radhakrishnan and J S Khehar told SEBI.

The market regulator submitted that it is taking action and issued notice to the companies and approached civil court in Bombay for freezing bank accounts.

Not satisfied by its contention, the bench said that issuing notice is not enough and that SEBI has to follow its last year's order.