Anil Narendra
It is unfortunate that discord
between Sahara Group and SEBI is worsening. The developments have taken such a
nasty turn that sword of arrest is hanging on Subrat Roy, Chief of the Sahara
Group. SEBI has filed a petition in the Supreme Court requesting it to order
the arrest of Subrat Roy in connection with not returning 24 thousand crores of
rupees to the investors. It has also been requested in the petition to stop him
to leave the country. SEBI’s request to the Supreme Court has come after two
companies of the Group failed to comply with the Court’s order which had
directed these companies to return 24,000 crores rupees to the investors. The
bench of Justice KS Radhakrishanan was requested by the Market Regulator to
allow hearing on the petition, to which the Bench agreed to hear in the first
week of April. The SEBI argued before the Bench to allow it to initiate action
for the arrest of Subrat Roy and for keeping him under custody in a civil
prison. It also requested to allow it to take action against Ashok Roy
Chowdhary and Ravi Shankar Dubey, Directors of both the companies after
allowing them sufficient opportunity to state their point of view. SEBI and
Sahara Group are engaged in legal battle for quite some time over the issue of
returning investors’ money. Two companies – Sahara India Real Estate
Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC) were
incorporated in 2008 and money was raised from about 22 million retail
investors. But, it is alleged that the money was not returned as promised. The
SEBI asked both the companies in June 2008 to return the money to investors. Sahara didn’t comply with the SEBI order. SEBI approached
the Supreme Court and the Court, in August, 2012, asked both the companies to
return the money to investors within 90 days. Sahara Group requested for more
time to repay the money. The Court, in December, 2012, asked the companies to
repay the amount to investors in three instalments. The first instalment of
5,120 crore rupees was to be paid immediately. The second instalment of 10,000
thousand rupees was to be paid in January 2013, whereas the third and last
instalment was to be paid in the first week of February 2013. After passing of
the stipulated last date of repayment of investors’ money on 6th February,
2013, the Supreme Court allowed SEBI to seal the bank accounts and confiscate
the properties of both the companies.
Meanwhile, the Sahara Group has
claimed that it has paid an amount of 5,120 crore rupees to SEBI and it has
also claimed that this amount is more than the total amount due to the bearers
of bonds of both the companies. After the filing of petition for the arrest of
Subrat Roy, the promoter of Sahara Group by SEBI in Supreme Court, the Sahara
Group, presenting its case, said that its entire business is being run legally
and it has not cheated its investors nor it has any intent to do so. The Group
has said that it has deposited an amount of more than 700 crore rupees as
advance tax with the Income Tax Department. Since the matter is sub judice, not
much comment can be made in this matter, but we think that the root of the
problem is the liability of the Sahara Group. SEBI says that Sahara
has to return 24,029 crore to the investors, whereas the Sahara Group claims
that it had returned 5,120 crore rupees and that take care of all of its
liability towards investors. Sahara has also
said that it has requested the SEBI on a number of times to talk over the
matter, but the SEBI has neither given it time nor any opportunity to put
forward its defence. The problem may not be solved by arresting and sealing the
accounts, confiscating passport of Subrat Roy. It would be better if the matter
of money is solved with money and first it should be decided that are the
Sahara companies still debtors after returning a sum of rupees 5,120 crore. If
the companies have some liability, then it should be decided with the consent
of both the sides. The way, SEBI is moving, smacks of revenge.
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