The perils of a delayed attachment

I would not have noticed them otherwise even in the sparsely populated 10 PM metro from Badarpur. They were four nineteen-somethings, probably in final year college, chattering continuously. I was too busy trying to understand the sartorial innovations on the second last page of a news magazine, that I had bought a while back. Suddenly, the frail, Jesus-lookalike with flowing hair and beard popped the question out of the blue, “Yeh Sahara ka kya hoga. Sebi attach karega kya?” Just a day earlier, the Supreme Court had pulled up the market regulator for not following orders and wasting precious time “issuing notices”.

Within days, the Securities and Exchange Board of India (Sebi) had passed two “unprecedented” orders to attach properties and assets worth some Rs 24,000 crore belonging to Sahara India Real Estate and Sahara Housing Invest. Riding on the huge public interest, discussions since have revolved around how the group will survive this body blow and how Sebi will manage to complete this humongous-looking exercise.

But, I feel there may not be much left in Sahara to attach. And, the “business as usual” mood that friends report to me in Sahara offices across the country reinforces this feeling. Contrary to popular perception, the Supreme Court did not give any fresh directive in February. The Sebi order draws its powers from the August 31 order, which has directions to the effect that if the records submitted by Sahara by September 10 were not satisfactory, then the assets can be attached and accounts frozen. So, the order should have come latest by September 13, 2012 and not on February 13, 2013. Had the order come earlier, what would have been Sahara’s response? I am not suggesting that the group would have given up easily. But it’s no rocket science that this delay gave Sahara all the time in the world to work out stuff. No one seems to know what caused this delay.

Another problem is that the Sebi’s attachment list talks about assets as of January 2012. Sahara is already suggesting in Bharatmata-stamped newspaper advertisements, that it is so fond of splashing in English papers with optionally fully convertible debenture (OFCD) money, that most of the assets are already gone and liabilities are a fraction of what Sebi is dreaming of. In the advertisement, Sahara claimed its liabilities are less than half of Rs 3,663.93 crore. The companies are going to submit a balance sheet dated December 31, 2012. According to the little accounting I know, if the liabilities side of a balance sheet totals less than Rs 1,832 crore, then the assets side cannot be more than Rs 1,832 crore.

Cut back to the metro. One that looked slightly more studious with short hair and rimless glasses with a green frame, said, “Attach kar dega” and adding almost as an afterthought, “Abhi ka Sebi chairman hai na Sinha. Woh bahut strict hai. Kar lega.” The girl in the group then asked, “What Sinha, S K Sinha?” Then they all corrected in unison, “U K Sinha.” The young dare to dream and hope dies last.