SC asks Sahara India to submit bank statements

SIRECL claims sold realty assets to Sahara Q shop, stake in Amby Valley to Co-operative Society

The Supreme Court on Tuesday directed Sahara India, the nodal partnership firm that controls businesses of the Sahara group, to give bank statements and ledger records to show the source of the Rs 20,000 crore of refunds to the group’s investors. A bench of judges K S Radhakrishnan and J S Khehar refused to grant relief to group chief Subrata Roy till the source of these funds was established.

This follows a hearing on a contempt petition filed by the Securities and Exchange Board of India (Sebi) against two Sahara group firms — Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp(SHICL) — for allegedly not complying with the court’s orders. On August 31, 2012, the court had ordered the two companies to pay Rs 24,029 crore to Sebi; the amount was to be refunded to 29.6 million investors of the group. The firms have paid Sebi only Rs 5,120 crore. They claim the rest of the amount has been refunded to investors directly, resulting in the contempt petition. The matter was adjourned to February 11.

MISSING MONEY

• Supreme Court has directed Sahara India, the nodal partnership firm that controls the group's businesses, to give bank statements and ledger records to show the source of refunds of Rs 20,000 crore made to the group's investors
• The apex court had earlier ordered Sahara India Real Estate and Sahara Housing Investment to pay Rs 24,029 crore to the Securities and Exchange Board of India (Sebi), to be refunded to 29.6 million investors
• The two firms have paid Sebi only Rs 5,120 crore, claiming the rest had been refunded directly

After securing title deeds and property documents claimed to be worth Rs 20,000 crore, the court had directed the Sahara firms to explain the source of these funds. Following this, the Sahara group sent three truckloads of documents to Sebi earlier this month. Sebi counsel Arvind Datar said, “The most important (piece of) information is not there.” He added the companies had provided documents showing they had sold assets worth thousands of crores to other group entities and had directed payments be made to Sahara India. “Did these companies actually pay to Sahara India? There is no evidence,” he said.

According to the submissions made by SIRECL to the court, it had sold 40% stake in Amby Valley to Sahara Credit Cooperative Society (SCSS) for Rs 13, 366 crore in May 2012, valuing each share at Rs 606. The company directed the proceeds to be paid to Sahara India.

Similarly, Sahara Q shop is said to have paid Rs 2,258 crore to the partnership firm and Sahara India Commercial Corp (SICCL) Rs 4,384 crore. The partnership firm acted as an agency and disbursed the sum to investors, Sahara claimed.

Datar submitted that he found were several discrepancies on preliminary scrutiny of these records. He said the regulator does not need daybooks pertaining to thousands of pages running into lakhs of pages but it needed a consolidated statement of the ledger. “They say the ledger account is being assimilated. The ledger account is never in the assimilation. It is there,” he said.

He also pointed out how annual return filed by Amby Valley with the Ministry of Corporate Affairs showed that the SIRECL had transferred its 220 million shares to Sahara Q Shop in September 2012. The Sebi counsel wondered how this was possible when SIRECL was telling the court that the Amby Valley shares were sold to SCSS in May 2012 itself.

Ram Jethmalani, the counsel for SIRECL, said he understood there was some lacunae in the details submitted and would get these rectified. When he expressed concerns over how Sebi was earning interest on the sum already submitted by Sahara and not making efforts to refund, judge JS Khehar intervened saying, “You have put the money in one pocket and taking it and putting in another pocket. The assets are sold to one group firm, then another. Since the beginning, we are going in circles.”

The bench also dismissed plea by Roy’s lawyer CA Sundaram seeking relief for going abroad saying, “It has been two months. No details have been given. We are not satisfied.”