How will he pay? Who will he pay?

The Supreme Court (SC) on Tuesday sent Sahara group chief, an ink-smeared Subrata Roy, and two of its group directors to judicial custody till they present a concrete proposal to refund money collected from investors through optionally fully convertible debentures (OFCD). The apex court has fixed March 11 as the next date of hearing.

The SC bench also ordered custody of the group's other two directors, Ravi Shankar Dubey and Ashok Roy Choudhary, letting the woman director, Vandana Bhargavafree.

Rejecting the proposal presented by the group to return money to investors, a bench of justices KS Radhakrishnan and JSKhehar noted that despite being given sufficient opportunities, there was no concrete proposal to honour its August 31, 2012, judgment and the subsequent orders of December 5, 2012, and February 25, 2013, to return the investors' money. "In exercise of the powers conferred under articles 129 and 142 of the Constitution, we order detention of all the contemnors, except Vandana Bhargava (the fourth respondent) and send them to judicial custody in Delhi, till the next date of hearing, March 11," the bench said.

The day started rather grimly for Roy, who was sprayed with ink outside the court, and ended equally grimly when he was sent to Tihar jail.Roy apologised before the bench for not complying with its order and assured that its order would be followed by him and sought more time for refunding money to investors. "I have faith in you. Punish me if I don't comply with your order," Roy submitted to the bench. While seeking more time, Roy said the group will sell its properties to refund the amount to the investors. The bench told Roy,"You can't make payment in cash as it is contrary to law. You have to make payment through demand draft or cheque." The bench also pulled up Sahara Group for not following its order and taking contradictory stand on payment of investors' money. "You pushed us to the corner. Had you been serious, this position would not have arrived," it said.Sowhat are the options before Sahara which has been playing hide and seek with the judiciary and Sebi and dragged the case for three years? Its options are limited for the simple reason that it does not know who to repay the money to.

The reason is that as the SC and Sebi rightly suspects, there were no investors. The entire OFCD was a money laundering operation which would have gone unnoticed, but for the alertness of Sebi.Itcame to light when Sahara tried to list a company, Sahara Prime City Ltd. In the red herring prospectus was hidden the fact that the company was in a tax dispute about OFCDs worth Rs20,000 crore. The entire money was collected in cash it stated, against all norms.Also, another letter by an unknown lawyer to Sebi, stated that the bonds issued by Sahara were not in order.Saharahas all this while remained outside regulatory supervision, moving deftly around the various authorities. This time, Sebi was on its throat. Various courts ruled in Sahara's favour regarding this issue till the SC put an end to the endless and successful litigation Sahara indulged in many lower courts across many states.

Sebi said it was the authority to decide on this issue. Sahara had argued that itwas the ministry of corporate affairs.Theissues to be decided now are: since there are no investors, with whom will this money rest with finally? The SC thinks it has to go back to the consolidated fund of India. Surprisingly, there has been no complaint from any investor regarding this OFCD. This is another indication that the huge numbers of investors do not exist. Or the company will have to prove the existence of all investors which is not a possibility, and then repay them. Sahara claims it has paid back most of the money. No proof exists.