Irked by Sahara group’s continuous defiance on refund of R19,000 crore to its 3.3 crore investors, the Supreme Court on Thursday asked chief Subrata Roy and three directors to appear before it in person on February 26 to give an explanation.
Rejecting Sahara counsel’s plea for one last chance, the bench, comprising justices KS Radhakrishnan and JS Khehar, asked Roy and all the three other directors — Ashok Roy Choudhary, Vandana Bhargava and Ravi Shankar Dubey — to be present before it on February 26 at 2 PM.
The direction came after one of Sahara’s counsels, CA Sundaram, objected to the court's proposal to let the market regulator Sebi sell off the land given as security to recover the dues. The judges wanted Sebi to take steps towards selling the properties irrespective of their value. It also suggested Sebi to initiate prosecution if the properties were not unencumbered.
“You won't pay. You won't allow to recover...This has been happening for the last two years. You have never complied with our orders and we know you will not. Let all alleged contemnors remain present before us now. They must know what is happening in court,” said the bench.
Irate over the ever-changing stands of the group over the timing and manner of re-payment of money raised illegally through debentures, the court said the matter must move now and there was “no point having status quo.”
“We have already given too much time to Sahara. We have been virtually begging Sahara for the last two years. They (Sahara) are not inclined to give details since beginning. Non-compliance of orders creates doubts in our mind,” it observed.
The group has been under fire for claiming that it has refunded thousands of crore to investors in cash.
“All through during arguments they (Sahara) didn't want to part away with their legitimate amount. If they would have raised such contentions then, we wouldn't have directed them to pay to Sebi. We are dealing with the question whether our judgment was followed and implemented. Contempt is secondary to us ,” Justice Radhakrishnan observed, adding the refund theory prior to its judgment “was never argued. There was not even a passing reference. There is a now binding and final judgment to pay to Sebi and not (directly to) investors.”
Rejecting Sahara's claim that it had refunded around R24,000 crore by way of dues to investors, Sebi told the court the group was constantly changing its version on the time and mode of refunding the investors, which did not inspire confidence.
The court is hearing Sebi's contempt plea against Sahara and its directors for not complying with the court's August 31, 2012 order that asked Sahara to pay R24,000 crore to Sebi, which, in turn, will refund investors in the optionally fully-convertible debentures (OFCDs) of Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL). But Sahara has so far only paid R5,120 crore to Sebi, senior counsel Arvind Datar argued.
Senior counsel Ram Jethmalani told the court that the group had refunded R22,885 crore to its investors, to which the Supreme Court had earlier asked the company to either reveal the sources or be ready to face inquiry by CBI and the Registrar of Companies.
“ We had raised in our written submissions. We are sufferers by our own neglect,” he added.
Earlier in January, the apex court had also barred Roy and others from leaving the country until the two group firms furnished details of refunding R19,000 crore.
Sebi also told the court it had received complaints indicating that instead of refunding the money, Sahara had converted or switched over investments in the OFCDs to schemes of other Sahara Group companies.
The fresh Sebi report highlighted various inconsistencies and contradictions in the stand adopted by Sahara in the case so far.
If so, there was no reason why the court could not have been informed of this at the June 14, 2012, hearing, it said. “If Sahara... decided to divest and refund in May 2012, what was the need to argue the case for two weeks in June, 2012?” Sebi said.