The Securities Exchange Board of India (Sebi) on Wednesday said that the Sahara group had overvalued its assets and not submitted original title deeds of properties worth Rs. 20,000 crore, prompting angry remarks from the Supreme Court for making a “mockery” of its order.
Sahara had submitted copies of title deeds of two plots of land in the suburbs of Mumbai — a 106-acre land parcel in Versova and a 200-acre plot in Vasai. The plot in Versova, according to the company, was worth around Rs. 19,000 crore, while the other plot in Vasai was worth about Rs. 1,000 crore.
Sebi, the capital markets watchdog, has challenged the estimates, arguing these were worth much less.
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 last year 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.
The court had ordered the group to repay as much Rs. 24,000 crore to millions of investors -- an eye-watering figure almost equal to India’s elementary universal education budget.
In October, the Supreme Court gave the company three weeks to hand over title deeds of its properties worth Rs. 20,000 crore to Sebi failing which the court could restrain Sahara managing worker and chairman Subrata Roy from leaving the country.
The Sebi counsel told a bench of justice KS Radhakrishnan and justice JS Kehar on Wednesday that besides being undervalued, portions of the land assets were also locked in litigation.
“It’s a mockery of our order if it has been complied with in this way,” said the bench after hearing Sebi’s submission. It did not pass orders as Sahara’s arguing counsel was not present during the hearing.
The arguments will continue on Thursday.
The Supreme Court, which is hearing Sebi’s contempt petitions for the company’s failure to comply with the court’s order directing it to refund Rs. 24,000 crore, refused to adjourn the matter on grounds of non-availability of the group’s advocate.
The company did not offer any comments for this story.
In December, the group was allowed to pay the money in three installments, with an immediate payment of Rs. 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 this year.