The Supreme Court on Wednesday said the money arranged by Sahara Group overseas for the release of Subrata Roy would be transferred into local banks only after necessary clearances from the Reserve Bank of India.
A bench headed by Justice TS Thakur agreed with senior counsel Shekhar Naphade’s contention that special permission by a competent authority under Foreign Exchange Management Act (FEMA) would be required to transfer money from an escrow account of a foreign bank agent. The apex court told Sahara that it would give further orders on accepting the amount only after the legal impediment is settled.
“We do not consider it necessary to pass any direction on transfer of proposed account which exists of third party. Any direction can be passed on satisfaction of the Securities and Exchange Board of India and the amicus curiae,” the bench said.
Sahara also informed the bench that the escrow account has been shifted to Bank of America.
Further, the court clarified to Sahara that it was not ready to consider any plea to release Roy on bail to arrange money for his bail. The bench said that Rs 5,000 crore cash and another Rs 5,000 crore as bank guarantee was yet to be deposited, adding that there was no change in the circumstances.
The court was hearing the issue of Sahara seeking its nod to raise a “junior loan” of $650 million (Rs 4,135 crore) to overcome the liability with Bank of China, which had lent money to Sahara for purchasing the Dream Downtown and The Plaza in New York and Grosvenor House in London.