In a report filed before the Delhi High Court, RBI said "physical verification carried out by RBI in June 1998 of the securities held by the company did not reveal any adverse features."

RBI report came following a high court order directing the central bank to file a financial status report on 14 NBFC's and residuary non banking companies (RNBC) including Sahara, Kuber and JVG group firms.

The report said RBI was monitoring on an on-going basis the activities of the company and considering the volume of deposits, SIFC in February 1998, was asked to broadbase its board of directors by including two reputed persons as directors.

RBI has also advised SIFC to appoint a management consultant for suggesting a suitable organisational structure commensurate with the sizeof its operations and an additional statutory auditor. According to the report the company has implemented the above advices.

In July this year, the company was asked to induct two more persons of all India eminence in its board of directors and submit quarterly report to RBI. As far as Sahara india Airlines was concerned, RBI said, it had no information about the financial status of the company as it did not fall under its (RBI's) jurisdiction.

Besides Sahara Airlines, RBI named four other companies which do not fall under its jurisdiction. These companies are Sahara India Commercial Corporation, JVG Departmental Stores, JVG Investments and Asia Television Network (ATN).

Justice Anil Dev Singh directed the Securities and Exchange Board of India (Sebi) to file a status report on these four companies within three weeks and fixed October 14 as the next date of hearing. RBI has issued a show cause notice to Kuber Mutual Benefits on January 19, 1998, for violation of NBFC directions and furnishing falseinformation, the report said. "The company's reply was found to be unsatisfactory and further information called for is awaited," it said.

In regard to JVG Finance, RBI report said a winding up petition had been filed before the high court and provisional liquidator had already been appointed to take charge of its assets.

As per the report, application by Hoffland Investments for issue of certificate of registration has been rejected by RBI on February 9, 1998.Another JVG group company, Hoffland Finance also failed to compaly with requirements of RBI Act 1934 and a complaint before chief metropolitan magistrate has been filed in May 1998 against the company and its directors.

RBI is contemplating action against Rapti Growth Fund for violation of several provisions of NBFC Directions 1998, the report said. Arihant Credit Capital is also being issued show cause notice for failing to maintain the required amount of liquid assets, RBI said. RBI has asked Crystal Credit Corporation to regularise excessdeposits and company assured the bank that it would comply with the directions. The application for registration of the company has been kept in abeyance pending finalisation of its annual accounts for the year 1997-98, RBI informed the court. Krishi Export Commercial Corporation has also failed to maintain the liquid assets as required under the RNBC Directions, 1987, RBI said.

Clarifying its earlier order dated August 13, the court said it does not cast any reflection of any of the respondent companies. On August 13, the court had restrained 14 firms including Sahara, JVG and Kuber group companies from disposing off their properties till further orders.

Sahara counsel Gopal Subramaniam pleaded before the court to vacate the August 13 order which was, however, not done by the court. Subramaniam also submitted that Sahara india was ready to create a cell to go into difficulties faced by any investor.