SC retains bar on Subrata Roy's foreign trips

Asks Sahara to reveal source of Rs 20k cr claimed to have been returned to investors

Retaining the bar on Sahara group chief Subrata Roy's visits abroad, the Supreme Court on Thursday asked his two real estate companies to disclose in two weeks the source of the Rs 20,000 crore these claimed to have refunded to the investors in their optionally fully-convertible debentures (OFCDs).

The companies, Sahara Housing Investment and Sahara India Real Estate,  maintain these have repaid 90 per cent of the investors. If that was so, the judges said, the source should have been reflected in their balance sheets.

The court had ordered the group to make refunds two years ago but, according to the Securities and Exchange Board of India (Sebi), that has not been done.

The bench headed by K S Radhakrishnan told the Sahara counsel the companies would have to return the money. "Now we will call the registrar of companies to find the source of money and even order a CBI (Central Bureau of Investigation) inquiry into the whole affair," the judge said.

"The court is not helpless; we will see our order is fully complied with," the bench said. The judges said the order to return the money was passed two years ago and nine months ago Sebi had moved the court for contempt action. "We don't want to burden Sebi any more," the judges said, threatening to take the matter to the Registrar of Companies, which, they said, was doing little in the matter.

"We have given maximum indulgence. We are driven to call the registrar," the court said. "If you take the history of the case, there is inconsistency in every affidavit filed by the Sahara companies. We have been most generous in this matter, but you don't appreciate our indulgence."

Though the court expected the companies to provide sufficient securities in the nature of title deeds of assets to guarantee the refund, Sebi counsel Arvind Datar on Thursday said all the property titles were shaky. The Aamby Valley project in Maharashtra was riddled with litigation and false power-of-attorney transactions, for which a key person had been arrested. Also, the entire project was without environment clearance and litigation for this was pending, he said.

Some other properties in other parts of the country had also been valued exorbitantly to meet the court's demand for adequate security. In several cases, the property was bought for a sum and the valuation showed more than 50 times appreciation over 10 years. Some deeds were not traceable, Datar said.

In view of the objections of Sebi about the title deeds, there was no arguments about Roy going out on business as the permission was conditional on sufficient security to the satisfaction  of Sebi.

Sebi had raised contempt action with regard to Sahara’s advertisements in all leading papers about the pending cases.  The court had at last hearing ordered publication  of apology in all the papers with equal prominence. The judges said in a lighter vein that they read all the newspapers and they have not been able to spot any apology so far. It should be done before Janauray 28, when the case will be heard again, after the production of title deeds with adequate security.