Mumbai: The Supreme Court on Friday rejected an offer by the Sahara group to repay in instalments bond investors whom it owes around 20,000 crore, ordered it to submit a fresh repayment plan by 11 March, and sent chairman Subrata Roy back to Tihar jail.

Lucknow-based Sahara put forward a plan under which it would reimburse 2,500 crore in three days and 14,900 crore in instalments every three months till 30 July 2015.

The Securities and Exchange Board of India (Sebi), the capital market regulator, opposed the plan, arguing that the group was supposed to pay 24,000 crore and not just 17,400 crore that it had offered to pay.

“The proposal is not proper and you must come out with an honourable proposal," a two-judge bench comprising justices K.S. Radhakrishnan and J.S. Khehar said.

The apex court was displeased that the Sahara group had sought the special bench to assemble for hearing the matter, but had not come up with an acceptable proposal.

“It’s an insult to us," Khehar said. “You should not make us assemble if you don’t have a proper proposal to make."

Appearing for Sahara, senior advocate C.A. Sundaram tried to convince the court that it was not possible at this stage to raise more money as Roy was in jail and his people had no access to him.

“The one person who can find money is not in a position to do it. He is the only one who can arrange money. He can work out (a proposal) if he is allowed to get out. We are also not allowed to access him," Sundaram pleaded.

The bench said financial consultants and lawyers of Roy would be allowed to meet him for two hours every day, saying: “We can arrange meetings, but you must pay the amount."

Roy, 65, was sent back to judicial custody in Tihar jail until the group can come up with an improved repayment plan.

Arvind K. Datar, senior counsel representing Sebi in the apex court, said the court was looking at a “faster repayment schedule" from the Sahara group and was in no mood to wait.

As the proposal to repay the money every three months has been rejected, the Sahara group has no alternative but to come up with a fresh proposal, he said.

Datar, however, ruled out any urgent hearing on the matter before 11 March.

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 who bought bonds sold by two group companies in a scheme the market regulator ruled was illegal.

Sahara offered Sebi bank guarantees for 22,500 crore and help in verifying information about investors, including those the group already claims to have repaid. It offered to depute “hundreds of competent workers" to assist the regulator.

“Keeping Subrata Roy in jail will not solve any problems," said Ramesh Vaidyanathan, a managing partner at law firm Advaya Legal.

Vaidyanathan said the apex court should insist on upfront payment by the Sahara group with clear-cut, intermediate deadlines for repaying the remaining money that will be disbursed under the scrutiny of the Supreme Court and with the assistance of Sebi.

He added that Sahara would have to generate cash by selling some of its real estate and hospitality assets.

Roy was arrested in Lucknow on 28 February, two days after the apex court issued a non-bailable warrant against him for failing to heed an order to appear before it. Roy pleaded that his 92-year-old mother was seriously ill and needed him by her side.

The Supreme Court is hearing a contempt petition filed by Sebi alleging that Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL) had failed to comply with the apex court’s 31 August 2012 directive to refund investors through the market regulator.

SIRECL and SHICL collected about 24,000 crore from at least 29.61 million investors between April 2008 and April 2011 through the sale of securities called optionally fully convertible debentures (OFCDs).

The capital market regulator said the OFCD sale was in violation of public issue norms under the companies law and the Sebi Act.

The group deposited 5,120 crore with the regulator on 5 December, which has grown to 5,620 crore including interest and money seized by Sebi from the group’s accounts, Sahara said in a press release.

It offered to pay 17,400 crore in instalments including 2,500 crore within three working days of the restriction on the operation of its bank accounts and deposits being lifted; 2,000 crore by 31 July, 2,500 crore by 31 October, 3,000 crore by 31 January 2015; 3,500 crore by 30 April 2015; and the balance 3,900 crore by 30 July 2015.

“To enable Saharas to generate the necessary funds to make the first and following of the aforesaid payments, Saharas and other Sahara group companies be forthwith permitted to operate the bank accounts/deposits," the group’s statement said.

It also sought the return of title deeds to assets deposited with Sebi as security so it could sell the assets and use the proceeds to repay investors. Sahara also asked Sebi to accept remaining “original vouchers, original receipts and all other relevant documents" within a time frame specified by the court, and complete their verification by 31 July 2015.

“Sebi may refund to all the investors (holding single or multiple accounts), who lodge their claim, subject to verification and may also involve Saharas in such process. Saharas would offer all assistance as may be required by Sebi for such purpose," it said.

The Sahara group claims to have stored around 30 truckloads of documents in a warehouse after Sebi refused to accept them.

On 28 February, the Supreme Court bench questioned the claims made by the Sahara group of having refunded money to a bulk of the investors. The claims of the group have cast suspicion over the existence of the investors, the court observed, adding that fact-finding authorities such as Sebi had found they do not exist.

PTI contributed to this story.

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 dispute with Sebi. Mint is contesting the case.

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