SEBI-Sahara Case: Supreme Court Directs Company To Deposit Rs 1,000 Crore Within A Month

The Supreme Court on Thursday directed two Sahara India Pariwar companies—Sahara India Real Estate Corp. and Sahara Housing Investment Corp.—to deposit Rs 1,000 crore in the SEBI-Sahara Fund within the next 30 days.

Additionally, Sahara has 30 days to negotiate a joint venture or land development agreement for their Versova property in order to make up the remaining shortfall.

Notably, the top court had directed Sahara to pay up Rs 25,000 crore in the SEBI-Sahara fund. So far, Sahara has paid about Rs 15,000 crore. Therefore, the remaining shortfall is currently Rs 10,000 crore.

The court further stated that any Sahara group company selling other property in the interim must deposit the proceeds into the SEBI-Sahara fund.

The court will take up the case again after a month to make sure that Sahara has made good on the court's directions.

Appearing for Sahara, senior advocate Kapil Sibal maintained that the top court ruling from 2012 gives an impression that all of Sahara's depositors are fictitious. "Supreme Court has proceeded on the assumption that there are no depositors," he said.

Sahara had sent 127 trucks to SEBI containing all the documents of depositors, Sibal said. Twelve years have passed and they (SEBI) still hasn't conducted the verification exercise, he said.

On the other hand, SEBI contended that Sahara's argument that it has already paid off nearly 95% of its depositors is entirely bogus.

Appearing for the market regulator, senior advocate Arvind Datar argued that Sahara hasn't been able to furnish bank statements of companies through which they have paid these investors.

Even if they were paying the investors through their sister concerns, Datar said that the law requires that if such a payment has been made, a related party indication should be there in the balance sheet of the said sister concerns.

"None of the sister concerns have reported these related party transactions in their balance sheets", Datar said.

In an August 2012 verdict, the top court had ordered two Sahara companies—Sahara India Real Estate Corp. and Sahara Housing Investment Corp.—to refund Rs 24,000 crore, along with 15% interest, to more than 2 crore small investors who had invested in their optionally fully convertible debentures between the years 2008 and 2011.

This order came after the regulator ruled that the funds were raised by the two firms in violation of its rules and regulations.

Sahara was eventually asked to deposit an estimated Rs 25,000 crore with SEBI for further refunds to investors, though the group has been maintaining that it had already refunded more than 95% of investors directly.

In 2020, SEBI filed a petition before the top court, pegging the amount that Sahara Group's two companies and Subrata Roy had to pay the regulator at Rs 62,000 crore.

Subrata Roy passed away in November last year. At the time, SEBI chief Madhabi Puri Buch had said that the case would continue even after the death of Roy, stating that the matter was about an entity's conduct and adding that it would continue regardless of whether an individual is there or not.

Notably, out of Rs 25,000 crore, Sahara has paid only Rs 15,000 crore as of now.