Sebi moves SC againt bail to Sahara's Subrata Roy for failure to pay up Rs62,600 crore
24 November 2020
The Securities and Exchange Board of India (Sebi) has filed a petition with the Supreme Court seeking cancellation of the parole granted to Sahara Group chief Subrata Roy as he failed to pay up Rs62,000 crore his companies owe to the public.
Sahara Group companies Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) have been directed to deposit an amount of Rs62,600 crore ($8.43 billion), including interest on investor money, with the market regulator. The money, which is long overdue, needs to be paid immediately or else his parole should be cancelled, Sebi has argued.
The Supreme Court had, in 2012 and 2015, passed orders directing Sahara Group to deposit the amounts outstanding against the Sahara India Parivar group's two companies and its chief Subrata Roy, which has increased by 143 per cent to Rs62,600 crore, including interest on the original amount of Rs25,700 crore he was ordered to pay in 2012.
Sebi has submitted in the court filing that the company has deposited only Rs15,000 crore, which is only a part of the principal amount. The company claims to have already deposited Rs22,000 crore with Sebi and that the market regulator is ‘mischievously’ adding interest on the entire amount to arrive at the sum now being demanded.
In 2012, the apex court ruled that the Sahara group companies violated securities laws and illegally raised over Rs25,781 crore. Sahara contended that it raised funds in cash from millions of Indians who could not avail of banking facilities. The investors, however, remained untraceable and Sebi ruled the bond scheme as illegal.
In 2013, SEBI initiated a Supreme Court-monitored recovery and refund for Rs24,000 crore collected by Sahara group from nearly 30 million investors. However, it received less than 20,000 claims in over six years and about 66 per cent of them were refunded a total amount of Rs106.10 crore. Sahara maintains that it has already returned the money of 95% of the investors.
The court sent Subrata Roy to jail in 2014 when he failed to attend a contempt of court hearing. Roy, however, has been on bail since 2016.