SEBI moves SC for Payment of Rs 62K Cr from Sahara Firms, wants Subrata Roy in Custody if not Paid

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Markets regulator Sebi has moved the Apex Court seeking direction to 2 Sahara firms to pay Rs 62,602.90 crore in compliance with the court’s earlier orders, failing which the group’s chief Subrata Roy be taken into custody. Sebi said the contemnors, Roy & his 2 firms– Sahara India Real Estate Corporation Ltd. (SIRECL) & Sahara Housing Investment Corporation Ltd. (SHICL) — are in gross violation of various orders passed by the court regarding the deposit of entire monies collected along with the interest.

Despite the Supreme Court granting various reliefs to Roy & his firms, they have neglected & failed to comply with various orders passed by this Court, the Securities & Exchange Board of India (Sebi) said. In its intervention application filed on Nov 18, Sebi said the “contemnors have not been complying with the orders passed by this Court despite the long rope provided to them” & their liability is increasing daily.

It said, “The contemnors are enjoying their release from custody’ as granted by this court vide order dated May 6, 20l6, further extended by this Court from time to time ‘without even any attempt at compliance with the orders passed by this Court”.

The markets regulator said that it would be just, expedient & in the interest of justice that this Court pass appropriate orders directing the Saharas to forthwith deposit the balance amount, which was Rs 62,602.90 crore as on September 30 this year, in Sebi-SAHARA refund account. Failing this, Sebi said, “the contemnors may be directed to be taken into custody” as was directed by the top court in its verdict on June 15, 2015.

The Supreme Court on Aug 31, 2012, in a series of directions had directed that SIRECL & SHICL would refund the amount collected from individual investors or group of investors, with interest of 15 per cent per annum to Sebi, from the date of receipt of the subscription amount till the date of repayment within three months to be deposited in a nationalised bank bearing maximum rate of interest.

The Sahara firms were also directed by the SC in 2012 to furnish the details with supporting documents to Sebi for establishing whether they had refunded any amount to the persons who had subscribed to the groups schemes. The Sebi said that as per the statements filed by Saharas on June 14, 2012, the outstanding liability of SIRECL as on April 30, 2012 stood at Rs 16,997 crores (principal amount) & the outstanding of liability of SHICL as on April 30,2012 stood at Rs 6352 crores (principal amount).

It said, in spite of the aforesaid clear directions giving clear timelines, the respondents (SIRECL & SHICL) in utter disregard, disrespect & disobedience of the directions of this court deliberately & wilfully, did not comply with any of the directions & thereby committed contempt of this court. The Sebi further stated that in terms of the 2012 order of the top court Sahara firms have till date deposited Rs 15,455.70 crore which has been invested in fixed deposits of various nationalised banks & as on September 30, 2020, the total amount along with interest earned in Sebi-Sahara refund account is Rs 22,589.01 crore.

It said that out of the total outstanding principal liability of Rs 25,781.32 crore, Sebi has realised only Rs 15,455.70 crore from Saharas & from sale of properties of the group. The balance amount of Rs 10,325.62 crore (principal amount) is still to be paid by Saharas. It is submitted that as on Sept 30, 2020, total net liability of Saharas was Rs 62,602.90 crore taking into consideration interest at Rs 15% in terms of directions of this Court dated Aug 31, 2012, it said.

On Jan 24, the SC had exempted Roy & 2 other directors from personal appearance till “further orders” in a case related to their alleged failure in depositing over Rs 25,700 crore in the Sebi-Sahara account for returning investors’ money. The Supreme Court, on Jan 31 last year, had directed Roy & two other directors, Ravi Shankar Dubey & Ashok Roy Choudhary, to personally appear before it “to enable the court to pass appropriate orders so that the law can take its own course & reach the desired conclusion”.

It had said that the efforts of the Sahara group to pay back did not “inspire the confidence of the court” as its order for deposit of over Rs 25,700 crore has not been complied with so far. Roy was sent to the Tihar Jail by the Supreme Court on March 4, 2014, & came out on parole after spending over 2 years in prison on May 6, 2016, to perform the last rites of his mother Chhabi Roy. He has been out of prison since then. Earlier, the Top Court had noted that the Sahara group has already deposited around Rs 20,000 crore in the Sebi-Sahara account, which includes Rs 15,000 crore principal amount & Rs 4,800 crore interest.

In July 2018, the auctioning process of Sahara group’s prized Aamby Valley properties was put off by the Supreme Court after it was informed that the auction notice didn’t elicit any response from prospective buyers. Roy & 2 other directors were arrested for failure of the group’s 2 companies — SIRECL & SHICL — to comply with the Court’s Aug 31, 2012 order to return Rs 25,000 crore to their investors. 

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