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HindustanTimes Sat,20 Sep 2014

Sahara group may present fresh proposal in SC tomorrow

HT Correspondent, Hindustan Times  New Delhi, March 23, 2014
First Published: 22:58 IST(23/3/2014) | Last Updated: 10:07 IST(24/3/2014)

The Supreme Court will on Tuesday hear Sahara chief Subrata Roy’s petition seeking bail from jail. Roy is facing contempt proceedings for violating court orders for alleged non-payment of more than Rs. 20,000 crore to millions of investors in schemes sold by two group companies.

The Sahara group is expected to present a fresh proposal after the apex court rejected a 10-step plan offered by the company on March 13.

Roy and two Sahara directors have been lodged in New Delhi’s Tihar jail since March 4 after Roy failed to convince judges that he is serious about repaying for two Sahara bond schemes that were declared illegal in 2012.

Sahara has claimed that 93% of the total outstanding amount has been refunded to “genuine” investors. It has also said that all evidences, including receipts and vouchers, have been deposited with capital market watchdog Securities and Exchange Board of India (Sebi) and not a single non-payment complaint has come up.

The group had stated that if the verification process throws out any investor who is not “genuine” or if there are fictitious accounts, then the group would deposit the amount to the government “in cash through Sebi within a period of 30 days”. It had also offered to pay Rs. 2,500 crore upfront and the rest in six monthly installments.

Sahara group did not respond to HT’s email seeking responses for this story.

Sahara catapulted into the limelight in the 1990s with a series of finance schemes for small investors but hit the headlines for all the wrong reasons in August 2012 when the Supreme Court said that schemes run by Sahara Housing Investment Corporation Ltd (SHICL) and Sahara India Real Estate Corporation Ltd (SIRECL) were illegal.

In 2010, Roshan Lal, a chartered accountant based out of Indore, sent a letter requesting the National Housing Bank (NHB) to investigate housing bonds issued by SIRECL and SHICL. The letter was forwarded to Sebi, which ordered an investigation but hit a hurdle as SIRECL and SHICL were not listed.

The market regulator, which was not empowered to investigate non-listed companies, carried out the investigations based on Sahara Prime City’s — the group’s real estate arm — application for an IPO that had mentioned bonds issued by SIRECL and SHICL.

Sebi had concluded that SIRECL and SHICL violated the Companies Act by collecting money through optionally fully-convertible unsecured debentures (OFCDs) and ordered the company not to raise any further funds using these instruments.

In December 2012, the group was allowed to pay the money in three installments, with an immediate payment of `5,120 crore to be followed by a tranche of Rs. 10,000 crore in the first week of January and the rest by the first week of February 2013.

The company has so far paid the first installment.

In the court
* Aug 2012: SC orders Sahara to return Rs. 24,000 cr plus 15% interest to investors, within three months
* Dec, 2012: Group allowed to pay the money in three installments — immediate payment of Rs. 5,120 cr; Rs. 10,000 cr in first week of Jan and remainder by first week of Feb 2013
* However, Sebi has said that neither of the last two installments have been paid; Sahara has claimed that 93% of “genuine” investors have been paid
* Subrata Roy has been sent to judicial custody forviolating court orders


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