SC gives Sahara 18 months to repay Rs36,000-cr investor money

The Supreme Court today ordered the Sahara group to repay Rs36,000 crore of investor money its two group companies, SIRECL and SHFCL, had collected from millions of small investors in the country, within 18 months.

The apex court also held on to its earlier order on Sahara to furnish Rs5,000 crore in cash and a bank guarantee of equal amount to secure release of its jailed chief Subrata Roy from prison.

A bench headed by Justice TSThakur stuck to a 26 March 2014 order of the apex court that Sahara chief Subrata Roy and two directors will only be released from Tihar jail, where they have been in judicial custody since 4 March 2014, only after depositing Rs5,000 crore in cash and a bank guarantee of like amount.

The court approved the format of the bank guarantee given to it by Sahara. ''We have accepted the format of bank guarantees'', subject to certain conditions, the bench said.

The court said asked Sahara to deposit the Rs36,000 crore in installments of Rs3,000 crore every two months, ie in nine installments, from the date of release.

In case Sahara defaults in paying two installments, which may not be consecutive, SEBI will encash the bank guarantee of Rs5,000 crore, the court added.

In case Sahara defaults on the payment of three installments, which may not necessarily be consecutive, then Subrata Roy and the two directors will surrender before Tihar jail authorities, failing which the police will arrest them, the court said.

The court also directed Roy to deposit his passport within 15 days before his release and not to leave the country and keep informing the police about his whereabouts.
 
''We direct them (Roy and two other jailed directors) to deposit their passport with the court. They shall not leave the country without prior permission of this court,'' the bench said.

It also asked Roy to keep apprising fortnightly the Tilak Marg police station here about his movements inside the country.

Earlier on 14 May, while reserving its order, the court had asked Sahara's counsel in chief to furnish a ''scheme'' within two weeks giving details as to how the group proposes to proceed with the sale of its assets and payment to the Sebi.

The apex court on 31 August 2012 had asked the group to refund Rs24,000 crore with 15-per cent interest in three months to the depositors

The funds were collected from investors by its two companies, SIRECL and SHFCL, in 2007-08 through OFCDs.

The bench, meanwhile, extended by eight weeks the facilities like telephone and internet to Roy inside the jail.

The possibility of Subrata Roy coming out of jail, however, is remote since counsel for Subrata Roy has informed the court that the financial institution backing the bank guarantee has withdrawn.

He said that they will be arranging a fresh bank guarantee, for which efforts are on.