SAT rejects Sahara plea against Sebi order on mutual fund biz

The Securities Appellate Tribunal (SAT) on Friday rejected Sahara's plea against a Sebi order cancelling its mutual fund licence, but granted the company six weeks' time to approach the Supreme Court.

Sebi had ordered cancellation of 'certificate of registration' of Sahara Mutual Fund in July 2015, while barring the fund house from taking any further subscription from investors, after the regulator found the group was "no longer fit and proper to carry on the business of mutual fund".

Sebi also ordered transfer of the business to another asset management company, to be followed by re-constitution of its board of trustees, failing which Sahara Mutual Fund was asked to redeem units allotted to all investors and thereafter wind up the operations. After hearing Sahara's plea against these directions, the Securities Appellate Tribunal (SAT) on Friday upheld Sebi's order saying it found "no merit in the appeal".

After the order was pronounced by the SAT, the counsel for the appellants made an oral appeal for staying the operation of the order for a period of six weeks to enable the appellants to approach the Supreme Court. "Accordingly, six weeks stay is granted," the SAT said in its 21-page order.

As per the latest data published by the mutual fund industry body AMFI (Association of Mutual Funds in India), Sahara Mutual Fund had average asset under management of about Rs 67 crore as on June-end 2017.