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Business News/ Politics / Policy/  SC orders Sahara chief Subrata Roy’s arrest

SC orders Sahara chief Subrata Roy’s arrest

Roy to be brought to court for hearing in investor refund case on 4 March

Ram Jethmalani, senior counsel representing Sahara, explained to the court that Subrata Roy was unable to appear before it because his 92-year-old mother was unwell. Photo: Hindustan TimesPremium
Ram Jethmalani, senior counsel representing Sahara, explained to the court that Subrata Roy was unable to appear before it because his 92-year-old mother was unwell. Photo: Hindustan Times

Mumbai: The Supreme Court issued a non-bailable arrest warrant against Sahara group chief Subrata Roy for failing to appear before the court on Wednesday in connection with contempt proceedings against two group firms and directors for not refunding money owed to bond investors.

On Tuesday, the apex court denied Roy’s plea seeking exemption from a personal appearance before it to answer for the failure of his companies to refund about 24,000 crore to investors who bought the so-called optionally fully convertible debentures (OFCDs) sold by them.

The Supreme Court order said: “...We issue non-bailable warrants of arrest qua Mr. Subrata Roy Sahara, alleged contemnor No.5. He shall be arrested and produced before this Court on March 04, 2014 at 2.00 p.m."

The other three directors of Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL)—Vandana Bhargava, Ashok Roy Choudhary and Ravi Shankar Dubey—were present in the Supreme Court for the hearing on Wednesday.

Ram Jethmalani, senior counsel representing Sahara, explained to a Supreme Court bench comprising justices K.S. Radhakrishnan and J.S. Khehar that Roy was unable to appear before it because his 92-year-old mother was unwell.

“His mother is dying and he is required to be by her side holding her hand," Jethmalani told the court.

In his submission to the court, copies of which were distributed to the press, the lawyer said Roy had flown from Lucknow to Delhi on Monday to be present at the hearing on Wednesday, but had to return the same day after receiving a message from doctors that his mother, a heart patient, was in critical condition.

The Sahara group also released copies of a letter written by Roy to Jethmalani on Wednesday that said: “If there is any doubt about condition of my mother, the Hon’ble Court may kindly send someone to my place in Lucknow and the truth shall be revealed. Nothing is more than Mother."

It added: “The moment I shall be in a position to go and come back, I shall inform immediately and then on any convenient date given by the Hon’ble Court, I shall be attending the court."

The Sahara group attached a medical statement by doctors attending to Roy’s mother at Sahara Hospital in Lucknow that said the condition of the patient, who has coronary heart disease, a permanent pacemaker implanted for complete heart block and has diabetes as well, had deteriorated since Monday.

“At this age of 92 years with this stage and condition with a fragile emotional status and deep attachment to her eldest son, we feel, both on humane as well as on medical ground and for her psychological strength, her eldest son’s presence by her side is very important apart from other son and daughter who all are present here," the doctors wrote in the statement.

The Supreme Court is hearing a contempt petition filed by the Securities and Exchange Board of India (Sebi) alleging that the Sahara group firms had failed to comply with the apex court’s 31 August 2012 direction to refund investors through the capital market regulator.

SIRECL and SHICL had collected money from at least 29.61 million investors between April 2008 and April 2011 through the sale of OFCDs. The capital market regulator had said that the OFCD sale was in violation of public issue norms under the companies law and the Sebi Act.

The Supreme Court, on 5 December 2012, gave the Sahara group companies nine weeks to pay back 24,000 crore with 15% interest to investors, with an immediate upfront payment of 5,120 crore.

The balance amount was to be deposited with Sebi in two instalments— 10,000 crore by the first week of January and the remaining by the first week of February.

The group handed over a draft for 5,120 crore on 5 December, but failed to pay the rest of the amount. In fact, it claimed that the total liabilities of SIRECL and SHICL to bond investors had dropped from 24,000 crore to 2,610 crore, which the group said had been paid to Sebi, along with a buffer amount of 2,500 crore.

At an earlier hearing earlier, the Supreme Court bench observed that Sebi could go ahead with the sale of properties of the group whose sale deeds have been handed over to the markets regulator to recover the money owed to investors.

“Those properties you can sell. We allow you to sell them and recover the money. If they are encumbered properties, then you can file a criminal case against the company. The case must be brought to a logical conclusion," the bench said.

The apex court had in November last year barred Roy from leaving the country and also restrained the group from selling any of its properties.

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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Published: 26 Feb 2014, 03:08 PM IST
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