Sahara repayment case: SC summons Subrata Roy, other directors

Sahara chief to appear personally on February 26

The Supreme Court on Thursday summoned Sahara group promoter Subrata Roy to appear before it on the coming Wednesday, on the hearing regarding repayment of about Rs 24,000 crore of dues to sundry investors.

The direction came after Roy’s counsel objected to the court’s suggestion that the Securities and Exchange Board of India (Sebi) sell properties under the title deeds presented by the group in response to earlier directions, and realise the dues in question. Sebi has accused Roy and his group firms of contempt of court, saying they’d hidden facts and not implemented earlier directions.

In a severe observation indicating what could follow, judge K S Radhakrishnan, “We will direct all contemnors to be present. From here, they will have to go to some other place.”

Two group companies, Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Invest Corporation (SHICL) are contesting the contempt proceedings initiated by Sebi, with regard to an August 2012 order by the apex court. The SC had directed the companies to repay Rs 24,029 crore, collected in breach of law, it had decided, to Sebi. The capital markets regulator was to, in turn, send it on to the individual depositors concerned. However, Sebi said, Sahara paid only Rs 5,120 crore; it has been claiming that the remaining amount had been refunded directly to the investors.

Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava, directors of the two companies in question, have also been summoned.

Earlier, the bench of judges comprising Radhakrishnan and J S Khehar rejected arguments by SIRECL counsel Ram Jethmalani that the refunds were made in cash through 4,700-odd branches of the group’s nodal partnership firm, Sahara India. Khehar noted these arguments of premature refunds have been rejected by the apex court on three occasions in the past. He said, “It (such arguments) should not be advanced again. But that is what you are assisted to say. You will say what you are assisted to say.”

Khehar added the group had not been following the orders and it was for Sebi to sell the properties and realise the amount. “Whatever we ask them (Sahara), they won’t do it. We don’t trust them to do it. We will allow you (Sebi) to sell. If there are encumbrances, then initiate criminal proceedings,” he said.

Sebi counsel Arvind Datar pointed to several discrepancies noticed in the documents given by Sahara. He said it would be difficult for Sebi as a regulator to enter into selling of these huge numbers of properties, scattered across the country. “They say these properties are worth over Rs 20,000 crore. Let them sell and deposit the amount with Sebi,” he argued.

To this, Radhakrishnan said, “They still won’t do it. If you want the money, then you have to take steps.”

The bench observed the properties can be sold through auction and any shortfall can be recouped from Sahara. “If there is any shortfall, we will ask them to pay again.”

At this point, Subrata Roy’s counsel, C A Sundaram, said the title deeds which had been given belonged to third-party companies and these could not be liquidated without their consent. “The board resolutions clearly say they are being submitted in lieu of the payment,” he argued.

Radhakrishnan said “It is all a one-man company. You (Roy) control them. What is the purpose of these securities, then?” When Sundaram insisted the properties could be sold without consent of the other group companies which owned these, the court said the group’s actions were “not righteous, not truthful.” Khehar said, “It has always been something in front and something else behind.” The bench then went on to pass the directions summoning the directors.