Excerpted from Sahara: The Untold Story by Tamal Bandyopadhyay.
The story of Sahara India Pariwar founder Subrata Roy, who died in Mumbai on November 14 aged 75, is the stuff of movies - of a spectacular rise and an equally spectacular fall. Born in Araria, Bihar, Roy was 30 when he set up Sahara in 1978. He started with a capital of about Rs 2,000, a peon, a clerk and his father's Lambretta scooter in Gorakhpur, eastern Uttar Pradesh, writes Tamal Bandyopadhyay in his 2014 book, Sahara: The Untold Story. Sahara was not his first venture.
Sushanto Roy and Seemanto Roy quit the board of Sahara India Real Estate Corp in Feb-Mar 2008; firm filed Red Herring Prospectus on March 13, 2008
Market regulator Sebi has begun prosecution proceedings against two Sahara firms and their top officials, while accusing them of failing to provide documents related to three crore investors as per a Supreme Court order.
In the high-profile case involving repayment of money to bondholders of two Sahara group firms, the Securities and Appellate Tribunal on Thursday dismissed a plea for extension of deadline for submitting investor documents to the market regulator Sebi.
The company is seeking more time to submit documents related to about three crore investors in the case involving two of its group companies.
Facing orders for freezing of bank accounts and attachment of properties, Sahara group Thursday night claimed the actions taken by Sebi are based on "old facts" and the orders for attaching assets of individuals is incorrect on part of the market regulator.
The Ministry of Corporate Affairs (MCA) told a litigation court that both entities were bound by Sebi regulations, as the money raising by the erstwhile Sahara India Real Estate Corp (SIRECL) and Sahara Housing Invest Corp Ltd (SHICL) would come under the definition of public issue.
Latest exercise follows two similar attempts made by Sebi in the past
The finance ministry and several agencies under it such as the Securities and Exchange Board of India (Sebi) and the Enforcement Directorate (ED), which are investigating the affairs of Sahara India Parivar, are worried about its exposure to National Spot Exchange Ltd (NSEL) products.
Unable to verify or trace a large number of bondholders in Sahara refund case, Sebi has begun a process to consult the business conglomerate for verifying the genuineness of such investors.
Besides Roy, two other directors, Ravi Shankar Dubey and Ashok Roy Choudhary, were also arrested for the failure of two group companies.
Sebi sets Sept 30 deadline to apply for Sahara refund
The income tax (IT) department seems to have quietly thrown a spanner in the works on the Securities and Exchange board of India (Sebi)'s two-year-long efforts to implement the Supreme Court order against the two Sahara group firms Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Invest Corporation (SHICL).
The apex court had also asked Sahara Group to provide it within two weeks the list of "unencumbered properties" which can be put for public auction to realise the remaining over Rs 14,000 crore
The Sahara Group had earlier sought 18 months' time to repay around Rs 9,000 crore balance amount of the principal amount of Rs 24,000 crore.
'Two esteemed foreign investors with huge funds are coming with us in our real estate and city development businesses.'
A criminal case has been registered against the group by the agency in connection with non-payment of crores of rupees to depositors after it got some fresh reports in this regard from the Sebi.
Sebi says Sahara investors refunded over Rs 42 cr.
The Tribunal adjourned till Monday this matter, which was listed for 'admission' this morning.
The apex court was irked when Sebi claimed that the group had allegedly obstructed the process by writing a letter to the Pune police raising the issue of law and order at the prime property.
The bench asked the official liquidator, attached with the Bombay high court, to auction Aamby Valley properties, estimated to be worth Rs 34,000 crore, and directly report to it
Sebi says it will directly transfer the refund money to the bank accounts of genuine investors.
The apex court told Roy that his proposal of paying Rs 1,500 crore, if the auction process was halted or postponed, was unbelievable.
Subrata Roy was arrested in March 2014 after the company failed to comply with a court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal.
A bank account is a must to get the refund and those without it have been asked by Sebi to open an account with a scheduled bank.
Senior advocate Kapil Sibal, representing Roy, said it was quite difficult to raise money as the properties have already been attached.
The apex court also asked Sahara Group to provide it within two weeks the list of 'unencumbered properties' which can be put on public auction.
While Sahara maintains it has already repaid more than 93 per cent of the outstanding dues directly to the concerned bondholders and the remaining amount was just about Rs 2,500 crore (Rs 25 billion), it deposited Rs 5,120 crore (Rs 51.2 billion) to Sebi in December 2012 towards the investor refunds as per Supreme Court orders.
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