Reveal source of Rs 22k cr paid to investors: SC to Sahara

Sahara's two real estate companies have been given two weeks to respond

While the restraint on Sahara boss Subrata Roy from going abroad was retained, the Supreme Court today asked his two real estate companies to disclose in two weeks the source of funds if they had repaid  Rs 20,000 crore to its investors in bonds, as they claimed. 

The companies have maintained that they have repaid 90% of the investors. If that was so, the judges said, the source should have been reflected in the balance sheet. The court order to return the investment is two years old, but it has not been done according to Sebi.

The bench headed by Justice K S Radhakrishan told Sahara counsels that the companies will definitely  have to return the money. “Now we will call the Registrar of Companies to find out the source of money and even order a CBI inquiry into the whole affair,” the judge said.

“The court is not helpless; we will see that that our order is fully complied with,” the judges observed in a fusillade of observations against the companies. They pointed out that the order to return the money to the investors was passed two years ago, and subsequently Sebi had moved the court for contempt action. That was nine months ago. “We don’t want to burden the Sebi anymore,” the judges said threatening to take the fight to the Registrar of Companies who they said was not doing anything in the matter.

“We have given maximum indulgence. We are driven to call the Registrar,” the court remarked. “If you take the history of the case, there is inconsistency in every affidavit filed by the Sahara companies. We have been most generous in this matter, but you don’t appreciate our indulgence.”

Though the court expected the Sahara firms to provide sufficient securities in the nature of title deeds of assets which could guarantee the refund to the investors, Sebi counsel Arvind Datar today pointed out that all the property titles are shaky. Amby Valley project in Maharashtra is riddled with litigation and false power of attorney transactions for which one key person has been arrested. Moreover, the entire project is without environment clearance for which litigation is pending.

Some other properties in other parts of the country also have been valued exhorbitantly to meet the court’s demand for adequate security. In several cases, the property was bought for a sum and the valuation showed more than 50 times appreciation in ten years. Some deeds are not traceable, Datar said.

In view of the objections of Sebi about the title deeds, there was no arguments about Roy going out on business as the permission was conditional on sufficient security to the satisfaction  of Sebi.

Sebi had raised contempt action with regard to Sahara’s advertisements in all leading papers about the pending cases.  The court had at last hearing ordered publication  of apology in all the papers with equal prominence. The judges said in a lighter vein that they read all the newspapers and they have not been able to spot any apology so far. It should be done before Janauray 28, when the case will be heard again, after the production of title deeds with adequate security.
Courtesy:
M J Antony  |  New Delhi
January 9, 2014 Last Updated at 16:42 IST
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