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SEBI moves Supreme Court to arrest Sahara founder Subrata Roy

‘Recalcitrant attitude’ of two Sahara companies.

Bureau Report

BANGALORE: The Securities and Exchange Board of India (SEBI) moved the Supreme Court for the arrest and detention in a civil prison of Sahara group promoter Subrata Roy Sahara and directors Ashok Roy Choudhary and Ravi Shankar Dubey, after hearing them, today.

Counsel for SEBI made a mention about the filing of the application before a Bench headed by Justice K. S. Radhakrishnan, who directed that the matter be listed for the first week of April, reported The Hindu.

SEBI also wanted a direction to the promoter and directors of Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) to deposit their passports with the Secretary- General of the Supreme Court and not to leave the country without permission of this court, the report said.

The application sought a direction to allow SEBI to give public notice seeking applications from genuine investors, and, after due verification, to refund the money to them. SEBI asked that it be allowed to appoint an Officer on Special Duty, to deal with objections and claims relating to property to be sold, and other officers for conducting the sale of the property.

SEBI said: “This application has become necessary in view of the recalcitrant attitude of the two Sahara companies (SIRECL and SHICL) and their promoter and Directors.”

SEBI said that on August 31, 2012, the court directed Sahara to furnish all documents in its custody, such as the application forms submitted by subscribers and documents relating to approval and allotment of bonds, to SEBI so as to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited, within 10 days. It said not only this direction but none of the directions contained in the August 31, 2012 judgment were complied with. Even on installments and other directions given by this court dated December 5, 2012 were not complied with. Thereafter, SEBI passed two orders on February 13, said Hindu.

It said: “Shockingly, although the two companies assured this court that only Rs. 351 crore is payable in the year ending March 31, 2013 and all bonds, except one category, are not redeemable, it is now claimed that except Rs. 2,620 crore all other amounts have been refunded. In view of the open, continued and consistent defiance of the orders of this court and the orders of SEBI, it is necessary that drastic measures be taken to protect the interest of three crore investors.”

It said: “Since the documents are not furnished in the manner prescribed by SEBI and further [since] they have been hopelessly mixed up, making it virtually impossible to correlate the application and the redemption vouchers, the same are, therefore, not acceptable.”

SEBI sought these directions to refund the money invested by the depositors together with interest at 15% from the date of deposit till payment. In case the refund claims are found for an amount to be more than the money made available by the respondents (the Saharas), the refund should be on a prorata basis for the time being, with the remaining amount paid to investors when the balance money is realized from the Saharas, SEBI said.

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