The Securities and Exchange Board of India (Sebi) will start selling the Sahara Group’s properties next week to repay a part of the Rs 36,000 crore owed to investors.
Senior advocate and Sebi counsel Arvind P Datar told a bench headed by Supreme Court Chief Justice TS Thakur on Wednesday that SBI Capital Markets and HDFC Realty have been engaged to sell 66 properties of the finance firm through an e-auction. The process, to be completed in four months, is expected to generate funds amounting to Rs 6,000 crore, he said.
Sahara group chief Subrata Roy – who has been lodged in Tihar Jail since March 4, 2014 – requested the court to release him on parole, saying he may not survive another summer behind bars due to his poor health. Refusing his plea, the court instead directed his company to furnish information on its properties in a sealed cover to ascertain if they were enough to cover investor liabilities.
The release of 67-year-old Roy could depend on the outcome of the first round of the property sale. “It might be enough to secure Roy’s bail, but not to refund the entire money to investors,” the bench said, seeking a complete list of its properties.
Roy needs to deposit Rs 5,000 crore in cash, and a bank guarantee of an equal amount to secure parole. The court was responding to a request for his release by Rajeev Dhawan, the Sahara chief’s counsel.
“The court should consider granting parole to him or put him under house arrest. I am required for the compliance of order of this court and I am not required for any offence,” he said. “My client’s health is deteriorating, and he may not be able to survive another summer in jail.”
The bench disagreed, stating that “substantial compliance” will be achieved once the money is refunded to investors. “It does not give us pleasure to keep somebody in jail. There has to be a change in circumstances, and there has to be a substantial compliance of our order,” it said. The case will be heard again on May 11.
A 2014 Supreme Court verdict had directed Roy’s company to refund Rs 36,000 crore (an amount inclusive of interest) to investors who had deposited money in two financial schemes launched by Sahara. The court upheld Sebi’s findings that the schemes flouted the law.
The move to auction Sahara’s assets is in compliance with a top court order instructing the regulator to launch the process of selling 87 “unencumbered” properties of the finance company.
Sahara, which became a household name after offering popular savings instruments in the 1990s, is free to provide inputs to Sebi for ensuring that its properties fetch a fair price.