SC admits RBI plea against Sahara; bars jail facilities for Roy

Sahara's troubles took a turn for the worse on Tuesday, when the Supreme Court allowed the Reserve Bank of India to proceed against the company for allegedly transferring Rs484.67 crore from the sale of securities of Sahara India Financial Company Ltd (SIFCL) to its partnership firm, Sahara India, instead of depositing the money in the Sahara-SEBI refund account.

The Supreme Court had on 4 June 2014 ordered Sahara to transfer any assets received from the sale of fixed deposits, bonds, or securities directly to the Sahara-SEBI refund account in order to repay depositors. It had barred Sahara from ''diverting'' assets for any other purpose.

Referring to a letter produced by Sahara's auditor, a three-judge bench led by Justice T S Thakur asked, ''How did you do this? How were the securities in question sold and transferred to Sahara India instead of depositing in the Sahara-SEBI account?''

The court directed the RBI to ''initiate such action as necessary'' against Sahara for cashing the securities which the SIFCL was required to maintain as per the RBI regulations.

According to RBI, it had passed orders barring SIFCL from selling 'directed securities', which include government bonds, FDRs, etc. As per audited accounts, SIFCL sold securities worth Rs524 crore, of which only Rs6 crore was used for repayment of dues to depositors.

Sahara's counsels claim that the money was sent to Sahara India to repay depositors. The group has challenged the correctness of auditors' findings.

However, the SC said that it had asked Sahara to pay the amount to the Securities & Exchange Board of India, and never directed it to repay investors directly. The apex court wondered how the group can violate a direct order by the RBI.

Meanwhile, on Tuesday's hearing the Sahara group also informed the court that its deal with Mirach is off. Calling the deal a 'mirage', Sahara said it is exploring other options for raising funds (See: Sahara chief to stay in jail as Mirach calls off hotel deal).

According to the group, it is currently at exploratory stage and has signed term sheets have for a few. It said a European bank has agreed to extend a loan of $1.53 billion, and even a Dutch pension fund has expressed interest in extending loan and investments.

The group is also considering the sale the of its Aamby Valley project.

It is also seeking conferencing facilities for Roy in Tihar Jail till 31 March. However, the SC refused this, saying it will now allow such facilities only when Sahara brings forth a concrete proposal.

''We can't allow a comfortable arrangement with internet, staff, food, etc,'' the court observed, adding that the Sahara Parivar is large enough, and should be doing the groundwork.

The next hearing of the case is on 13 March.