Supreme Court accuses Sahara of manipulating orders

At a hearing today, the court accused Sahara of manipulating the court's order as it had not asked the group to refund investors directly. The court also said Sahara was not cooperating with the regulator. "Pay genuine investors from the money deposited by Sahara, transfer the remaining funds to the government if you do not find genuine investors," the court told Sebi. It also slammed Sahara for approaching the Allahabad High Court and other forums with a seeming intent to delay the proceedings. On March 15, Sebi had sought the Supreme Court's permission to "take measures for (the) arrest and detention in civil prison of promoter of Sahara Shri Subrata Roy Sahara and the two male directors, viz., Shri Ashok Roy Choudhary and Shri Ravi Shankar Dubey, after giving reasonable opportunity of hearing". (Read story) Reacting to the petition, the Sahara Group issued a statement accusing Sebi of "maliciously leaking news without substance" to the media. It also added that the market regulator is not allowed to appeal for "civil detention" under the Sebi Act. Sebi accuses Sahara of raising thousands of crore from small investors through an outlawed financial scheme and failing to comply with the Supreme Court's order issued in August to refund Rs. 25,000 crore to nearly three crore investors. Sahara says it has paid Rs. 20,000 crore to investors and has deposited Rs. 5,000 crore with Sebi, which it says the regulator has failed to distribute. On April 10, Mr Roy met with representatives of the market regulator in Mumbai to explain how the firm is refunding thousands of small investors, as ordered by the Supreme Court. Sources at Sebi said Sahara did not share details requested of its immovable assets, including property of the 2 companies that the regulator wants to sell to refund investors. Mr Roy, who is 64, complained that he was not offered "even a cup of tea" at the hour-long meeting. He was accompanied by three of his executives. Sebi says Sahara has not been able to prove that it is paying back investors directly and wants to sell immovable assets of two Sahara companies to pay back investors. After the April 10 meeting, Mr Roy said that the regulator seemed more interested in his personal assets. The Sahara chief and his directors had been asked to produce original title deeds of all assets and investments of Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL). Sahara argues that Sebi "deliberately refused" to accept documents and information submitted by it. A recent investigation by NDTV has raised questions on whether Sahara has at all repaid its investors and if the investors are even genuine. 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. Sebi says it has received complaints from investors that they are being forced by agents and officials of Sahara to switch the money held through the bonds to other investment products sold by the group.

Supreme Court accuses Sahara of manipulating orders

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