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Sahara chief Subrata Roy will remain in jail for at least another week with the company telling the Supreme Court on Thursday that it could not afford the Rs. 10,000-crore bail amount.
The court had on Wednesday granted Roy and two Sahara directors interim bail on the condition that they pay Rs. 10,000 crore — half in cash to be deposited in court and the balance as a bank guarantee in favour of market regulator Sebi, as part payment of the Rs. 20,000 crore Sahara owes its investors.
Roy, facing contempt proceedings for failing to pay the Rs. 20,000 crore, has been in Tihar since March 4 and will likely stay there at least till the next hearing on April 3.
Sahara argued that it needed at least three months to get the bank guarantee and requested the court to de-freeze its accounts and order Roy’s release so they could arrange for the money.
Roy’s lawyers also continued to challenge what they called his “illegal” custody. “No process has been followed in sending him to custody,” senior counsel Ram Jethmalani said, urging the two-judge bench to recuse itself from hearing the petition challenging the custody.
“Moments are very rare when we have to tell the court you are terribly wrong. This is a very, very extraordinary situation,” said senior advocate Rajeev Dhawan.
Sahara, which catapulted into the limelight in the 1990s with a series of finance schemes for small investors, hit the headlines for all the wrong reasons in August 2012 when the SC said schemes run by the group were illegal.
Ordered by the court to pay Rs. 20,000 crore, Sahara maintains 93% of the total outstanding amount has already been refunded to “genuine” investors. It claims all evidence, including receipts and vouchers, have been deposited with the Securities Exchange Board of India and not a single non-payment complaint has come up. It has also stated that if the verification process throws up any non-genuine investor or fictitious accounts, the group is willing to deposit the amount to the government “in cash through Sebi within 30 days”.
After repeated summons to Roy over several months went unanswered, the court lost its patience and ordered a non-bailable warrant against him and his company’s directors in February. Since Roy’s arrest, it has rejected all of Sahara’s proposals to refund the investors in instalments.
While Sahara today claims difficulty in raising funds, the group bought three major international hotels between 2010 and 2012 — London’s Grosvenor House for £470 million, New York’s Plaza Hotel for $570 million and Hotel Dream Down Town, New York, for $795 million. It also has a land bank of more than 33,000 acres ranging from the posh Aamby Valley near Pune to prime plots in Mumbai, Delhi and Gurgaon and more than 15,000 acres in Macedonia.