SC raps Sahara Group for dragging feet on refunds

Written by fe Bureau | New Delhi | Updated: Dec 4 2012, 07:51am hrs
The Supreme Court on Monday pulled up the Sahara Group for not refunding Rs 27,000 crore to its investors within the specified time-frame. A bench headed by chief justice Altamas Kabir also asked Sahara senior counsel Gopal Subramaniam to inform by Tuesday whether the group would be able to repay its investors within a week.

Justice Kabir flayed the firms for not complying with earlier orders, remarking that the firms plea does not merit a hearing. Your intention is very shaky and every step taken by you is shaky. We cant interpret our order according to your needs, the bench said while rebutting Subramaniam for trying to justify the groups failure to refund the entire amount. You are justifying your conduct, which is not justifiable, justice Kabir said.

The SC had on August 31 directed the Sahara Group entities Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation) and Sahara Housing Investment Corporation to refund around R27,000 crore collected from investors through optionally fully convertible debentures (OFCDs).

Opposing Sahara's plea, market regulator Sebi submitted that it has already filed a contempt petition against them and strong action should be taken against the firms for non-compliance with the apex court's August 31 directions to furnish documents within 10 days to Sebi to verify investors who had invested in its OFCDs.

The bench, however, said it was more concerned about ordinary people who invested in Sahara companies. If you want me to send them to jail, we would send them, but we are more concerned about the investment made by the common man, justice Kabir observed.

Sahara had moved the SC against the refusal of the Securities and Appellate Tribunal to accept a deposit or pay order of Rs 5,120 crore, arguing it had fulfilled the court order directing a full refund of Rs 17,400 crore to all its investors by November 30, the deadline set by the apex court.

The apex court had said that if the group failed to meet the payment deadline, its assets could be seized to enable full refund of money to 3.3 crore investors. The group claims it had offered the money to Sebi, which declined it, prompting it to move the tribunal, which last week refused to accept the money saying a higher court was already seized of the matter.

Sahara's rush to the apex court was triggered by Sebi's decision to write to 88 banks seeking account details of the companies and writing to secretaries of two states inquiring about the firms' moveable and immoveable assets.

Reading the said letter in its entirety, it is clear that Sebi is taking steps towards attachment of assets/accounts on the basis that the appellants are in non-compliance of the August 31 judgment and that, as per the said judgment, the market regulator is entitled to attach /sell assets/accounts of the appellants, the Sahara firms said in their appeal.

While Sebi has filed a contempt of court application with the Supreme Court against Sahara for violating court orders, the latter had filed a review plea.

Sahara and Sebi have since been at loggerheads over the modalities of payment. Sahara claimed that it had handed over all papers related to its investors within the stipulated time, while Sebi claims that it was yet to receive the necessary documents.