The Supreme Court on Wednesday told market regulator Sebi that it was free to freeze accounts and seize properties of Sahara group’s two companies for defying court orders by not refunding Rs. 24,000 crore to investors.
A special bench of Justice KS Radhakrishnan and Justice JS Khehar also pulled up Sebi for not taking action against the companies - Sahara India Real Estate Corporation(SIREC) and Sahara Housing Investment Corporation (SHIC) - in accordance with its August 31, 2012 order that allowed the regulator to attach properties and freeze companies’ bank accounts in case of a violation.
Acting on Sebi’s contempt petition, the bench also issued notice to the group and gave it four weeks time to respond as to why contempt action should not be initiated against the companies for not complying with its order.
”What steps are you taking? You are not taking any action. The judgement tells you what to do but you are not doing it,” the bench told Sebi counsel arguing the contempt petition.
It wasn’t satisfied by Sebi’s contention that the market regulator had approached civil court in Bombay for freezing the companies’ bank accounts. The regulator added it had also issued notice to the Sahara companies.
“Why you gave notice and did not take action. You have to execute our order,” the bench said.
It also made clear that proceedings pending before it on contempt plea against the companies would not come in the way of Sebi taking action against the group.
The Sahara group, however, maintained that large portion of the amount had already been redeemed to investors before the judgement was delivered. Sahara, represented by senior advocate Ram Jethmalani, also said that nothing is due and it is difficult to deposit Rs. 10,000 crore.
The SC had on August 31 last year directed the two companies to refund around Rs. 24,000 crore to their investors within three months with 15% interest per annum for raising the amount from its investors in violation of rules and regulations.