Supreme Court raises question on Sahara firms transacting crores in cash

The Supreme Court on Tuesday raised question on how Sahara transacted thousands of crores in cash with its sister firms for purportedly refunding Rs 20,000 crore to its investors after market regulator Securities and Exchange Board of India (Sebi) alleged that no bank statement was furnished by the group to show the money trail. A bench of justices K S Radhakrishnan and J S Khehar asked Sebi to find out whether the Company Law and the RBI guidelines allow cash transactions of such large amount of money. "I think there is some RBI regulation under which transaction beyond Rs ten lakh has to be done through cheque," the bench said asking the market regulator to find out about the RBI rules. At the beginning of the proceedings, senior advocate Arvind Dattar, appearing for Sebi, contended that the group has not supplied the bank statements of the its firms to show the trail of money which it claims to have refunded to investors as the company said that all transactions were done in cash. "They say everything was paid in cash so there is no bank statement. It says that Rs 16,000 crore cash was paid by the Sahara Credit Cooperative Society to Sahara India in May-June 2012," he said. Senior advocate Ram Jethmalani, appearing for the group, contended that he has not gone through the documents of the company filed in the court and sought time to respond to the allegation of Sebi. The bench, after a brief hearing, adjourned the case for February 20. The apex court had earlier directed the Group to reveal source of Rs 22,885 crore which it claimed to have refunded to its investors. Sending a clear message that the court is not "helpless" in taking action for flouting its directions, the apex court had rapped Sahara chief Subrata Roy and the group for refusing to disclose the source of money. "Don't think that the court is helpless. We can ask the CBI and the Registrar of Companies to conduct probe against you. We are not helpless. We will find out the source of money if you don't reveal it. We would ask the probe agencies to find out," the bench had said. Tightening the noose around Sahara group for not refunding Rs 20,000 crore of investors' money, the Supreme Court had on November 21 last year barred Roy from leaving the country and also restrained it from selling any of its properties. It had on August 31, 2012 directed the Sahara group to refund Rs 24,000 crore by November end. The deadline was further extended and the companies were directed to deposit Rs 5,120 crore immediately and Rs 10,000 crore in first week of January and the remaining amount in first week of February. The group, which had handed over the draft of Rs 5,120 crore on December 5, has been accused of failing to pay the rest of the amount. The two companies, their promoter Roy and directors Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary were told to refund the collected money to the regulator. Three contempt petitions filed by Sebi against Mr Roy, the two firms - Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC) - and their directors are pending before the court.

Supreme Court raises question on Sahara firms transacting crores in cash

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