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Rediff.com  » Business » Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

Last updated on: March 28, 2014 21:30 IST

Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

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Sharat Pradhan in Lucknow

The contribution 'appeal' was made through a one-page letter signed by directors of a hitherto unknown society and 'associates' of the group. Company officials, however, disowned any connection with the appeal, reports Sharat Pradhan from Lucknow.

In a dramatic twist to the Sebi-Sahara saga, an innovative idea was on Friday floated for the collection of at least Rs 100,000 each from Sahara employees and 'well-wishers' to garner at least Rs 5,000 crore (Rs 50 billion) and secure group chief Subrata Roy's release from Tihar jail.

The money has been proposed to be collected in lieu of shares in a hitherto unheard of society, Saharayn e-Multipurpose Society Ltd, which would be allotted to each contributing employee of the entertainment-cum-retail business conglomerate.

The society has its registered office at 195, ground floor, Maharana Pratap Nagar, St Zone I,  Bhopal - 462011, Madhya Pradesh, and interestingly this has never been known to be among the Sahara group’s key operational areas.

Sahara executive director D K Srivastava has issued a circular to their workers and agents to contribute at least Rs 100,000 each.

Going by Sahara’s own claims of having some 11 lakh employees on its rolls, a contribution of Rs 100,000 per person could mop up Rs 11,000 crore (Rs 110 billion).

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Image: Sahara hopes to raise at least Rs 5,000 crore to secure Subrata Roy's release from Tihar jail.
Photographs: Pradeep Bandekar

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Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

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When contacted, a senior Sahara official clarified that the letter has not been issued by Subrata Roy or by the management and "it is only an emotional initiative from the people in reaction to the prevailing situation’.

He said this should not be construed as the Sahara group or the management asking its workers to make any contribution.

"As Saharasri (the name by which Roy is called in the group) has built this organisation as a Pariwar or family, many such letters are coming from across the country. Hope this unique sentiment for the chief guardian of our Pariwar would be understood," he added.

Roy, 65, has been in Tihar jail since March 4 and the Supreme Court recently proposed a conditional interim bail for him asking the group to deposit Rs 10,000 crore (Rs 100 billion), including Rs 5,000 crore (Rs 50 billion) as bank guarantee.

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Image: A Sahara official clarified that the letter has not been issued by Subrata Roy or by the management.
Photographs: Anindito Mukherjee/Reuters

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Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

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However, the group's lawyers informed the court on Thursday that they were finding it difficult to immediately mobilise such a large amount to get Roy and two directors out on bail.

The lawyers also submitted that the apex court's order for detaining Roy for not paying Rs 20,000 crore (Rs 200 billion) of investors money to the Securities and Exchange Board of India was illegal and unconstitutional and sought the quashing of this order.

Appearing for Roy and the group, advocates also told a bench of justices K S Radhakrishnan and J S Khehar, which had passed the detention order, that its approach is ‘biased’ and it should not hear the petition challenging the order.

The Sahara group, which says that it has already refunded the bulk of the money due to investors in the Sebi case, claims to have total net worth of over Rs 68,000 crore (Rs 680 billion) and assets totalling more than Rs 1.5 lakh crore (Rs 1.5 trillion).

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Image: The Sahara group claims to have a total net worth of over Rs 68,000 crore (Rs 680 billion).
Photographs: Pawan Kumar/Reuters

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Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

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Giving out its reasons for making such an appeal , the circular claims, 'The Supreme Court has already seized all of Sahara’s bank accounts and its moveable as well as immoveable properties. It would take us at least three to four months to get those restrictions lifted.'

It went on to point out that such a wait for three-four months would amount to letting the company’s boss to further languish behind bars . 'It would be in the larger interest and dignity of the company to deposit the cash amount of Rs 5,000 crore as early as possible,' the circular added.

'Further, the title deeds of assets having value over Rs 20,000 crore (Rs 200 billion) are lying with Sebi only.

'If case by case the court allows to sell assets, it will be a distress sale which would not fetch more than 20-25 per cent of the real value of the asset.

'Moreover, money from the sale of bigger assets will only come in long term installments in view of Indian financial strength,' Sahara's lawyer said in a statement.

Talking about the contributions made by the Sahara India Pariwar's chief guardian Subrata Roy Sahara, the appeal said that a ‘profitable scheme’ is being proposed by the Saharayn E-Multipurpose Society Ltd for the workers, associates and well-wishers of the group.

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Image: Subrata Roy.
Photographs: Reuters

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Appeal goes out to Sahara Pariwar to shell out Rs 1 lakh each for Roy's bail

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The circular dated March 26 urges the employees to shell out 'Rs 100,000, Rs 200,000, Rs 300,000 or more -- even beyond your own capability -- as quickly as possible, so that the required money can be deposited to get our most revered guardian a respectable bail out of the judicial custody he is currently in'.

The circular, which repeatedly refers to Roy as 'most respected and worshipful', blames the apex court for being 'unfair' to him and for 'sending him to judicial custody without following the laid down constitutional or judicial procedures'.

The circular even terms the March 25 Supreme Court decision to turn down Roy’s revised proposal for a bail as 'most negative and highly astonishing'.

Even if the freeze order is removed, these assets would not fetch the right valuation, it added, while requesting all employees and field workers of the group to make their contribution.

Officials at the group, on the other hand, said that Sahara has been repeatedly saying that more than 93 per cent of the outstanding dues have been already returned to investors and submission of any fresh money to Sebi was not required.

They also claimed that the Sahara group has an "apprehension that money paid to Sebi will remain with the regulator for a very long time as they have not shown any intention to verify accounts yet".

The group has accused Sebi of not even starting the process of verification of investors despite 18 months having passed, so that they can be identified and money can be refunded to them.

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Image: Subrata Roy being taken to court.
Photographs: Reuters

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The Supreme Court had ordered on August 31, 2012, the refund of over Rs 24,000 crore (Rs 240 billion) by two Sahara firms to an estimated three crore (30 million) investors.

The group was asked to deposit the money with Sebi, which was asked to facilitate the refund to genuine investors after verifying their credentials.

Later, in December that year, Sahara was asked to deposit the money in three installments including an immediate payment of Rs 5,120 crore (Rs 51.2 billion).

While the group deposited the first installment, it claimed to have already refunded more than Rs 20,000 crore (Rs 200 billion) in cash directly to the investors.

However, Sebi has contested this claim.

Later, Sebi ordered the attachment of bank accounts and properties of the group for recovery of the outstanding dues from Sahara.

It is not clear whether the company is entitled to seek fresh deposits in this circumvent manner - considering the series of restraints issued by Sebi as well as the apex court.  No company official was available for comment.


Image: Sebi ordered the attachment of bank accounts and properties of the group for recovery of the outstanding dues from Sahara.
Photographs: Reuters

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