Sebi seeks arrest of Sahara chief Subrata Roy

The Securities and Exchange Board of India (Sebi) on Friday urged the Supreme Court to permit it to arrest Sahara Group promoter Subrata Roy and two directors for failing to reimburse about Rs 24,000 crore to investors.

It also sought the court’s direction to Roy and directors Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava to deposit their passports to the apex court.

 Sebi’s application stated, “Pass an order permitting the Sebi to take measures for arrest and detention in civil prison of promoter of Saharas, Roy, and the two male directors Choudhary and Dubey, after giving reasonable opportunity of hearing.”

The application was mentioned before a bench presided over by Justice K S Radhakrishnan, which scheduled it for hearing in April first week. “Even the simple directions of furnishing data, giving details of properties, disclosing the nature of the entities wherein the investments have been made have not been complied with”.

“Shockingly, although the two companies assured this court that only Rs 351 crore was payable in the year ending 31/03/2013 and all the 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 are taken to protect the interest of three crore investors,” the application read.

The apex court last month pulled up Sahara group for failing to return the money by the first week of February.

Contempt proceedings

Two Sahara Group companies, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, along with Roy, are facing contempt proceedings. Another apex court bench on February 6 allowed the Sebi to take coercive actions for defying court orders after they failed to refund the investors.

A bench of justices Radhakrishnan and J S Khehar on August 31 last year directed the two companies to refund around Rs 24,000 crore to the investors within three months with 15 per cent annual interest. The money was allegedly raised in violation of rules and regulations.

The matter was taken up before a bench headed by Chief Justice Altamas Kabir, which on December 5 granted the group nine weeks to refund the money, with an immediate upfront payment of Rs 5,120 crore.