The man who served the order was Sebi boards full time member Prashant Saran. But Subrata Roy wasted the opportunity when he came in April to discuss how to refund the money. He, instead, launched into theatrics later with journalists assembled outside the Sebi Bhawan about how the officers inside did not offer him even a cup of tea.
Subrata Roys trouble started soon thereafter. Sarans order followed from an earlier one he had issued a month ago to attach several Sahara group properties, bank accounts and movable and immovable properties of Sahara Housing Investment Corp (SHICL) and Sahara India Real Estate Corp (SIRECL). That order also asked all scheduled banks to freeze personal accounts and properties of Subrata Roy and three full time members of the board of directors Vandana Bhargava, Ravi Shanker Dubey and Ashok Roy Choudhary. By blocking access to finance and asking for a clear time table to settle the repayments, Sebi made it almost impossible for the media-real estate-financial sector group to claim any leeway from the courts, without getting them out of the way.
Prashant Saran had come to Sebi on deputation from the RBI where he was working as chef general manager. The wiry officer with a Masters degree in Physics from Punjab University has also forwarded all his orders to the Enforcement Directorate, which has opened up another source of concern for Sahara.
Along with Saran, Sebi deployed J Ranganayakulu, the executive director (legal) to track the Sahara cases through the courts. Ranganayakulu tracked the developments from the time Sahara filed the first case at the Allahabad high court challenging Sebis right to police the raising of the deposits by its two group companies SHICL and SIRECL, their appeal in the Supreme Court, back to the Securities Appellate Tribunal and then again back to the apex court.
Along with him was the Sebi counsel Arvind Datar, a lawyer from the Madras High Court. If Ranganayakulu and Saran can be credited for fighting for investors rights to their logical conclusion, the actual handling of the cases in the courts was by Datar. Sahara had hired some of the best legal brains in the country to fight its cause including Fali S Nariman and Ram Jethmalani. Datar, incidentally, has also authored a commentary on the Indian constitution. But before these high octane developments, the Sahara case emerged from a homework done by the corporation financing department which at that time was headed by Usha Narayanan.
Sahara had filed a document for raising equity from the markets through its group company Sahara Prime City Limited, again in March 2008. The draft offer document with the regulator contained the nugget of an information that its sister companies planned to raise funds through two unsecured optionally fully convertible debentures. These were the SHICL and SIRECL cases which were investigated into by then full time member KM Abraham. When the group did not allegedly provide the desired details on the number of application and subscription amount received Abrahams team retrieved those details from MCA21 portal of the Ministry of Corporate Affairs, to establish that the money raising was indeed a public issue and so needed to be listed on the stock exchanges.
When the episode began CB Bhave was the chairman of Sebi and lent his full force to the investigations. After he quit, UK Sinha raised the ante. While the Sebi team worked tirelessly to take this case to its conclusion, the two Sebi chiefs will have to be credited for absorbing all the pressure that could have come from various lobbies.