Unethical Business Practices in Finance


SIRECL and SHECL are companies of Sahara India Pariwar. At 30 September 2009 when SEBI (security exchange board of India) checked documents of these companies SEBI find some mistake in fund raising process of SIRECL & SHECL. And then some time after SEBI got complain against these two company. After getting complains SEBI stared to check the documents in proper manner and then SEBI find out that SIRECL & SHECL had issued its OFCD (a type of debentures in which the OFCD holders have option to change their debentures into equity)  to 2-2.5 crore people worth 20000 crore without permission of SEBI. Legally a company must complete its fund raising process within 6 weeks with permission of SEBI but these companies were raising fund by OFCD from last two years.

SEBI banned these illegal activities of fund raising and ordered companies to return amount to investor with 15% interest. Sahara file case against SEBI first at Allahabad high court and then to Supreme Court and court also said companies to return the money with interest and to show documents of investors to SEBI so that SEBI can give money to investor. Then Sahara sent the documents to SEBI. By investigating that documents SEBI came to know that there were no proper details of OFCD holder and find that the case may be of money laundering. Sahara did not deposit total amount in given time period to SEBI then Supreme Court allowed to Sahara group for depositing money in three instalments. But company deposited only one instalment and when SEBI asked for other 2, company said we gave money to investor ourselves but then SEBI demanded proof of returning money, Sahara did not provide any proof so it was all money laundering. On 26 Feb 2014 Supreme Court gave order to arrest the chairmen of Sahara group and in Nov. 2017 ED clammed case of money laundering against these two companies and the case is still running.

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