Sebi wants action against Subrata Roy for contempt
Sebi on Tuesday made a forceful plea to the Supreme Court to punish Sahara chief Subrata Roy along with his two firms and their directors for not complying with its order for refunding Rs 24,000 crore to investors.
Refuting the contention of Roy who had submitted that he cannot be penalised for non-refund of the money by Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC), the market regulator said that the business tycoon held 70 per cent stake in the companies and liable for contempt of court punishable upto to six months imprisonment or fine.
“By virtue of being promoter of the companies, he holds the same position as that of Directors of the companies and he is also liable for contempt. He is liable for punishment along with other Directors of the companies,” senior advocate Arvind Dattar told a bench of justices K S Radhakrishnan and J S Khehar.
Dattar sought maximum punishment for Roy and others under Section 12 of Contempt of Court Act which provides maximum punishment of six months jail term. “Keeping in mind the magnitude of fund collected by the companies, it is fit case for imposing maximum punishment on Roy and companies,” he said.
“There can not be a clearer case of contempt. Non payment of funds amounts to contempt,” he said, adding that the companies have violated not one but three orders of the apex court.
The market regulator contended that the companies have not complied with apex court orders passed on August 31, December 5 last year on the issue of refunding the amount.
A magistrate on Tuesday issued fresh summons to two Sahara Group firms and their top executives, including the organisation chief Subrata Roy, asking them to appear on September 30 in connection with the alleged violation of regulations of Companies Act and Sebi Act.
The court had earlier taken cognisance of the case filed by Sebi and issued summons but no report was filed regarding service of summons (by Sebi) to the respondents, following which the court issued fresh summons against them.
The magistrate had on July 7 taken cognisance of Sebi's complaint and issued process against the two companies SIRECL and SHICL and their top officials under various sections of the Companies Act and the Sebi Act.