Absolutism

Absolutism states that all actions are intrinsically right or wrong. This case study clearly
signifies that Sahara had defied this ethical principle in numerous instances .
Some of the instance are listed below:
1. Failure in acting as per SEBI norms while issuing OFCD: Sahara had issued OFCD in
2008 for its two companies Sahara India Real Estate Corporation Ltd (SIRECL) and
Sahara Housing Investment Corporation Ltd (SHICL). These OFCDs had reportedly
amounts to Rs 4,800 crore. As per SEBI rules for issuing debentures “Any offer of
securities made to 50 or more persons has to be construed as a “Public Offer” under the
provisions of Companies Act, 1956”. Here moral absolutism was contravened. Sahara
should have abided by the law and acted as per SEBI’s rules and regulations in the first
place.
2. Failure in abiding to supreme court vedict: The Supreme Court on 31st August, 2012 in
one of had passed verdict that the Sahara Group has to refund around Rs 17,400 crore to
their investors within 3 months from the date of the order with an interest of 15%.
While the group paid the first instalment, it failed to meet the deadline for other two
payments and rather claimed to have already paid more than Rs 20,000 crore directly to
the investors. This claim by Sahara group ultimately proved to be false. Sahara should
not have put forth false claims when they failed to repay the refund amount.
3. Creating false evidence to escape punishment: To provide evidence that Saharah had
repaid all the investors, Sahara forged documents and sent them to SEBI headquaters in
127 trucks. To verify this, SEBI advertised four times in more than 144 newspapers to
ask the investors of Sahara to refund the money. Only around 4,600 investors in two
Sahara group companies had come forward to claim refunds from the SEBI, which had
asked those who had purchased bonds issued by the entities to claim their money. Here
Sahara should not have created false evidence or forged evidence.This is against moral
absolutism.
Part 3 : Recommendations
This case analysis clearly highlights incorrect steps taken by Sahara at every stage to
bypass law and penalties. In the beginning,w hile issuing OFCD, Sahara should have
abided by all the rules and regulations by SEBI. When this point was highlighted by SEBI,
Sahara should have focused on the conflict resoltion rather than filing a case against SEBI.
When Supreme court had penalised Sahara group for not abiding by laws, Sahara should
have tried to repay the amount in time. Inplace of false claims put forth by Shaara group,
they could have appealed the court to extend the deadline, if they were not able to raise the
required amount on time.
It was unethical to forge false docments without complete details and send to SEBI for
verification. This step taken by Sahara was unecessary as it wasted a lot of time of SEBI
officials and other stakeholders involved in the process. An honest declaration of their
inability could have saved Sahara from unwanted humilitaion and loss of dignity, when
Chairman was jailed in 2014.
It is unethical for any organization to cover up their fault. Sahara adopted unethical path of
not accepting their fault which eventually lead to a donimo effect. This would have been
eliminated, had Sahara initally taken up ethical steps.