SC gives Sahara more time to repay investors
05 December 2012
The Sahara Group today managed to buy time to repay its investors Rs27,000 crore that it is accused of having raised under false pretexts. The Supreme Court has now asked Rs5,120 crore immediately and the balance in two instalments - Rs10,000 crore in the first week of January, and the rest in the first week of February.
The Supreme Court had on Monday expressed strong displeasure at the Sahara group for ignoring its order to refund the money to investors, and asked the two Sahara companies involved - Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd - to explain by Tuesday if the entire amount can be refunded within a week. "Your intention is very shaky. Your every step is shaky,'' the court had said.
On Tuesday, the companies sought more time to furnish the details about the refund of the money it had mopped up from investors through optionally fully-convertible debentures (OFCDs), following which the case was adjourned till today.
On 31 August, the Supreme Court had ruled that the finance schemes run by the two Sahara companies were illegal and ordered the group to repay Rs24,000 crore plus 15 per cent interest to almost three crore mostly small investors. Under the scheme rejected by the Supreme Court, the two Sahara firms had offered bonds to small investors, promising, in some cases, to return three times the face value after 10 years.
The Supreme Court had then ordered that the money be repaid within 90 days. It also directed the Securities & Exchange Board of India to facilitate the refund of this money to the investors. Sahara was to ordered to give details of all the investors to SEBI within 10 days, failing which the regulator could freeze accounts and attach properties of the two firms. The court left it to SEBI to ascertain the genuineness of each investor before a refund was made.
In October, Sahara, through a review petition, appealed to the Supreme Court to reconsider its order sought more time.