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Business News/ Companies / News/  Sahara makes fresh refund proposal in SC for Subrata Roy’s release
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Sahara makes fresh refund proposal in SC for Subrata Roy’s release

Group says it will pay `20,000 crore in five instalments to Sebi towards refunds to investors

Sahara chairman Subrata Roy was put behind bars by Supreme Court on 4 March. Photo: Hindustan TimesPremium
Sahara chairman Subrata Roy was put behind bars by Supreme Court on 4 March. Photo: Hindustan Times

New Delhi: The Sahara group, controlled by the jailed Subrata Roy, on Tuesday submitted a fresh proposal to the Supreme Court that it would pay 20,000 crore in five instalments to the Securities and Exchange Board of India (Sebi) towards refunds to investors.

While Sahara claims it has to repay 20,000 crore to investors who bought bonds sold by two group companies in a scheme the market regulator later ruled as illegal, Sebi says the group has to repay around 24,000 crore.

The apex court had earlier this month rejected Sahara’s proposal to reimburse 2,500 crore in three days and 14,900 crore in instalments every three months till 30 July 2015.

In its latest plan, Sahara has said it will pay 2,500 crore within three days of the proposal being accepted by the apex court, three instalments of 3,500 crore each by 30 June, 31 September (an apparent typographical error made by the company), and 31 December, and the remaining 7,000 crore by 31 March next year.

The court is likely to take up the new proposal on Wednesday.

Sahara had raised 25,781 crore by issuing so-called optionally fully convertible debentures to 29.6 million investors under the scheme.

The company on Tuesday asked the Supreme Court to allow it to “give an irrevocable bank guarantee at any time for unpaid amount then due" or “for the remaining unpaid aforesaid amounts".

It also asked the court to allow it to operate its bank accounts and deposits “to generate the necessary funds" for the payments, and sought the removal of all other restrictions.

On 13 February 2013, Sebi had ordered a freeze on all bank accounts of Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL), their promoters and directors. Sebi also attached several properties, development rights in projects and equity stakes in other group firms owned by SIRECL and SHICL.

This happened after the Supreme Court on 6 February last year questioned Sebi’s inaction against the two Sahara firms despite having the power to freeze bank accounts and seize properties in pursuit of refunds of the money raised by the firms.

In another submission on Tuesday, senior lawyer Ram Jethmalani, who is representing Roy, said that the latter’s detention was “patently illegal and without the authority of law". Jethmalani has said that Roy, in an affidavit filed on 29 April 2013, had said that he had “nothing to do with the management of the day-to-day affairs of SIRECL and SHICL".

Roy, who owns 70% of both SIRECL and SHICL, was found an “officer in default" by Sebi.

On 4 March, the Supreme Court sent Roy to judicial custody in Tihar jail for a week after he failed to spell out a detailed plan for refunding investors.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s disputes with Sebi. Mint is contesting the case.

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Published: 25 Mar 2014, 05:32 PM IST
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