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Why SEBI is not acting against Kingfisher in the same manner it acted against Sahara Group?
Sahara Group's chief Subrata Roy Sahara is in Tihar Jail now for the last few weeks and the chances of his coming out from the Jail appears very low in view of the stringent financial conditions imposed by the Supreme Court for his bail.

While we must congratulate Securities and Exchange Board of India(SEBI) for the appropriate action initiated by the regulatory body against the Sahara Group Companies for their inability to pay their investors a huge amount taken as deposits, we find that the actions of the SEBI in this regard are "selective" and it is very difficult to assume that SEBI is acting like an independent autonomous regulatory body.

It is being reported that Sahara has defaulted to its depositors an amount of around Rs. 20,000 crores. Surely the amount is big and therefore the offence of not being able to repay the same is also big. But Sahara is not the only Corporate Group of Company which has caused loss to its investors. If SEBI starts to investigate in the fair manner, it will find hundreds of such cases where public money has been "stolen" by the promoters in a manner and style, no regulatory body should approve.

Here, we are taking the example of the much hyped low cost airline - "Deccan Aviation Limited", promoted by Captain Gopinath. The IPO of this company called- "Deccan Aviation Limited" came in 2006 and the share of this new and so-called low cost airline was allowed to be issued by SEBI at a hefty price of Rs. 148 as against the face value of just Rs. 10.

The issue was subscribed by the public and the company remained functional and operated as a low cost airline for some time. After some time, the listed company- "Deccan Aviation Limited" was sold to the promoters of Kingfisher Airlines Limited and subsequently merged into it. This meant that the investors who have bought shares of "Deccan Aviation Limited" for a hefty price of Rs. 148 were left high and dry as they subscribed the shares at a higher price looking into the background of the promoters and their business model.

After this company was merged with Kingfisher Airlines Limited, share price of the company started to fall in view of the accumulated losses of the Kingfisher Airlines and the share price of Kingfisher Airline of just Rs. 2 as against the amount of Rs.148 invested by the public in 2006.

Now the situation is more worse than Sahara Group. Kingfisher Airline is now closed and they have defaulted not only on payment of salaries and taxes, they have to pay more than Rs 7500 crores to Banks and have accumulated losses around 10000 Crores. Is this all not public money?

While we appreciate the pro-active approach of SEBI to protect public money from the manipulations of the promoters, we must say that why SEBI is adopting two different yardsticks one for Sahara Group and other one for Kingfisher Airlines?

There must be many more such cases where public has been caused huge losses by the promoters by resorting to such manipulative practices, the case cited here in above is a very high profile case widely reported in media. It is for SEBI to answer why it is not taking any action in the uniform manner against all such manipulators and defaulters of the public money.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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