Home Legal News SEBI Approaches Supreme Court to Make Sahara Pay Rs. 62,600 Crore or Take Subrata Roy and Other Directors into Custody:

SEBI Approaches Supreme Court to Make Sahara Pay Rs. 62,600 Crore or Take Subrata Roy and Other Directors into Custody:

by Shreya
Sahara Group Subrata Roy, SEBI in Supreme Court against Sahara Group
The Securities Exchange Board of India (SEBI) has moved the Supreme Court against Sahara India chief, Subrata Roy and two Sahara companies seeking immediate payment of Rs. 62,602 crore – money which the market regulator contended was owed by Sahara to investors as per the top court’s judgments of 2012 and 2015.

The plea has sought a direction from the court to take Subrata Roy and other directors into custody in case of failure to make such payment.

Case Background/ Contentions

According to SEBI’s application, the principal liability was of Rs. 25,781.32 crore of which SEBI managed to recover only Rs 15,455.70 crore from Sahara and from sale of properties of Sahara.

“The balance amount of Rs. 10,325.62 crore (principla amount) is still to be paid by Sahara. It is submitted that as on September 30, 2020, the total net liability of Sahara was Rs. 62602.9 crore taking into consideration interest at 15% in terms of directions of the Supreme Court dated August 31, 2012,” the application reads.

The plea has alleged that Sahara India companies have committed contempt of court by failing to comply with the 2012 order of the apex court directing Sahara to “refund the amounts collected through Red-Herring Prospectuses within a period of three months in a nationalised bank

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“The contemnors are in gross violation of various orders passed by the Supreme Court regarding deposit of money. In order to facilitate the deposit of amounts, to comply with various orders passed by this Court, this Hon’ble Court has been kind enough to grant various reliefs as and when sought by the contemnors. However, contemnors have, till date, neglected and failed to comply with various orders passed by this Hon’ble Court,” the plea said.

In the plea, SEBI has also prayed for an expedient hearing of its application seeking an appointment of Receiver to take charge of all properties, inside and outside India of the Sahara India Group in order to sell the same and recover amounts to be refunded.

The Supreme Court had, in March 2014, sent Subrata Roy and two other Directors to jail for failure to comply with the court’s directions for repayment. They were released on parole in May 2016 when Subrata Roy’s mother passed away. His parole has been extended multiple times since then.

SEBI has alleged in its plea that despite clear directions from the apex court, Sahara disobeyed the directions willfully and committed contempt of court causing great inconvenience to the market regulator.

The plea has also highlighted how a Special Enforcement Cell (SEC) was constituted by SEBI to handle the work relating to the verification process of documents and making refunds to eligible investors which have many applications under various stages of refund, enquiring about the refund money.

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Due to the overvalued and incomplete land title deeds submitted by Sahara to SEBI, even after conducting several auction rounds, SEBI has managed to sell properties only in 5 out of 70 locations.

Sahara had moved the Securities Appellate Tribunal (SAT) alleging that SEBI was not accepting the documents furnished by them. However, the same was dismissed by SAT as premature and not maintainable.

This order was challenged before the Supreme Court which, in December 2012, rejected all refund theories propounded by Sahara and directed payment of all amounts along with interest.

In 2015, when Sahara again approached the Supreme Court with a plea to exempt them from depositing the amount purportedly already redeemed by them, the Court refused to budge.

SEBI has contended in the plea that “despite the long rope which the court provided to Sahara, their liability is only rising which the directors are enjoying their release from the custody granted by the Supreme Court since 2016.”

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