Investment scam: SC tells Sahara to pay Rs 36,000 cr in 18 months

R Sedhuraman

Legal Correspondent

New Delhi, June 19

The Supreme Court today directed the Sahara group to pay Rs 36,000 crore in 18 months to market regulator SEBI for getting rid of the cases against its jailed chief Subrata Roy for not refunding Rs 22,842 crore, which two of the group companies had collected from small investors in the form of debentures.

A three-member Bench headed by Justice TS Thakur said the group could pay the amount, which included 15% interest on the fund it had raised, in nine instalments every two months. While the first eight instalments would be Rs 3,000 crore each, the remaining amount would have to be cleared in the last instalment.

The refund schedule would start the day Roy and two of his directors, RS Dubey and AR Choudhary, are released from Tihar Jail, where they are in judicial custody since March 4, 2014, in the case. Their release would depend on the group paying the bail amount of Rs 10,000 crore, equally split in cash and bank guarantee.

The company has already paid the cash component, but has been struggling to offer the bank guarantee. The Bench today approved the format of the bank guarantee suggested by the group on the condition that SEBI would encash it if there was default in the payment of two instalments towards refund of public money.

Also, Roy and the two directors would be back in jail in case the group failed to pay three instalments (not necessarily consecutive), the Bench clarified in the 27-page ruling.

The Bench, which included Justices Anil R Dave and AK Sikri, rejected the group’s contention that it had returned in cash all the money it had collected from more than 30 million investors. It, however, clarified that if this claim turned out to be true, either in full or in part, the amounts being deposited with SEBI in instalments would be returned to the group to that extent.

Appearing for Sahara, senior advocate Kapil Sibal said the group would have to discuss with the bank, which had agreed to provide the guarantee, afresh in view of the conditions placed by the Bench for its encashment by the SEBI.

The Bench said it was aware of the fact that Roy and two others “are deprived of their liberty for the past 15 months,” but it was bound to ensure that the group complied with two orders passed by the SC on August 31, 2012 and December 5, 2012 asking them to return the public funds through SEBI.

Sahara India Real Estate Corporation Ltd (SHICL) and Sahara Housing Investment Corporation Ltd (SHICL) had collected the deposits from the general public in the form of Optional Fully Convertible Debentures (OFCD). Subsequently, SEBI declared the OFCD as illegal and directed the group to return the deposits with 15% interest and this was upheld by the SC.