SEBI seize bank accounts, properties of Sahara Group, Roy.
Bureau Report
CHENNAI: After entrepreneur Vijay Mallya, it was the turn of yet another high profile Indian industrialist to face the heat on unpaid loans, and have assets seized: the Securities and Exchange Board of India (SEBI) seized bank accounts and properties of two Sahara Group companies and its promoter, Subrata Roy.
In an order issued today
, the capital market regulator ordered the attachment of the bank accounts and properties of Roy and a few other directors; assets of two Sahara Group companies that had forayed into real estate; development rights on thousands of acres of land in Aamby Valley; prime locations near Gurgaon, Versova (Mumbai) and Lucknow; and stakes in several special purpose vehicles floated to set up townships and realty projects, reported The Economic Times.
The companies in question have been barred from redeeming mutual funds and operating bank and demat accounts. Also, they have been directed to recover investments in other Sahara Group companies.
Banks holding accounts of the companies and individuals concerned have been told to move funds to a prescribed account opened to refund investors who had purchased the convertible debentures floated by the Sahara entities to raise close to Rs 20,000 crore. The orders will come into effect immediately, said the report.
In a statement, Sahara Group reiterated that it owed only Rs. 5,120 crore to investors. It said an application seeking interim relief would come up in the Supreme Court.
The company claimed that SEBI’s order was based on outdated information. “Today’s order of Sebi for attachment of the assets is based on old facts and details of assets as of January 2012. Since then, facts have changed in view of redemptions made by Sahara from time to time. This fact of redemption was known to Sebi. Hence, today’s order does not take into account the changed facts and circumstances,” it said.
Sahara also expressed concern that accounts of individuals had been frozen since it was the company that was liable to repay the money, said the Times report.
Sandeep Parekh, founder of Finsec Law Advisors, was quoted as saying by the Times, “The only option for them now is to pray, and perhaps seek more time from Supreme Court to delay any freeze of assets. This could probably be the first time that Sebi has attached properties and bank accounts.”
If the regulator succeeds in monetizing the assets after it attaches them, it would be possible to refund a sizeable part of the liability of Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation (SHICL) — the firms that had issued OFCDs to close to three crore investors between April 2008 and 2011.
Along with Roy, the other directors whose movable and immovable properties would be attached are Vandana Bhargava,Ravi Shanker Dubey and Ashok Roy Choudhary.
In India, the Lucknow-resident Roy, 64, is also a household name for several reasons, apart from being the founder and chairman of the Sahara India Pariwar, founded in 1978. He also owns Pune Warriors in the IPL cricket championship, London’s Grosvenor House, New York City’s Plaza Hotel, and has 42.5% stake in Force India.
He has been named by India Today magazine as among the 10 Most Powerful People of India, and the Sahara Group was termed by the Time magazine as ‘the second largest employer in India’ after the Indian Railways.